The Role of Corporate Governance, Dividend Policy, and Capital Structure on Ownership Structure Toward the Firm Value

Abstract

The purpose of this study was to determine the role of corporate governance, dividend policy and capital structure on ownership structure toward the firm value. The study was conducted to manufacturing firms listed at the Indonesia Stock Exchange during 2008-2011. The results showed that institutional majority ownership structure is the cause of agency problems, which can be mitigated by corporate governance mechanism and dividend policy, thereby increasing the value of the of the company. Capital structure can be used as a mechanism to reduce agency problems but cannot affect the value of the company due to the implementation of the company's corporate governance resulting in increasing debt in the capital structure and dividend policy. Dividend policy and capital structure is not a substitute nor complementary in reducing agency problems.

Keywords: Ownership Structure, Corporate Governance, Capital Structure, Dividend Policy, Firm Value