INTERNAL GOVERNANCE MECHANISMS AND AGENCY COST OF INDONESIAN NON-FINANCIAL COMPANIES.

NOVIASARI, TRIZA (2008) INTERNAL GOVERNANCE MECHANISMS AND AGENCY COST OF INDONESIAN NON-FINANCIAL COMPANIES. Other thesis, FAKULTAS EKONOMI.

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Abstract

This study examines the influence of trvo intemal governance mechanisms; independent commissioner and concentrated ownership on the agency cost of Indonesian non-financial listed companies in 2002-2A06 that measured by Asset Turnover (ATO) and Operating Expense Ratio (OPEX). Result shows that internal govemance mechanisms measured by the proportions of independent commissioner and concentrated ownership have a significant influence on agency cost measured by ATO. But for the second measurement of agency cost, OPEX, result shows otherwise, internal governance mechanisms measured by the proportions of independent commissioner and concentrated ownership have not significantly influence agency cost. This seems to suggest that independent commissioner and concentrated ownership is an effective mechanism in mitigating the agency cost as measured by asset tumover (ATO) although the operating expense ratio (OPEX) indicator perceives otherwise.

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