Effect of corporate governance on expropriation practices with family ownership as moderation variable

Gladys Bella Novenna Rettob; Imam Subekti; Endang Mardiati

doi:10.21744/irjmis.v8n3.1611

Authors

Gladys Bella Novenna Rettob
gladysrettob021194@gmail.com
Faculty of Economics and Business, Universitas Brawijaya, Indonesia
Imam Subekti Faculty of Economics and Business, Universitas Brawijaya, Indonesia
Endang Mardiati Faculty of Economics and Business, Universitas Brawijaya, Indonesia

Keywords:

corporate governance, expropriation practices, family ownership

Abstract

The practice of expropriation is one of the accounting frauds committed by controlling shareholders because of their control rights that exceed cash flow rights. This study aims to examine and analyze the effect of corporate governance on the practice of expropriation and the existence of family ownership as a moderating variable. This research was conducted at companies in all sectors of the Indonesia Stock Exchange. Based on the purposive sampling method, the sample of this study was 78 companies with 312 observations. The research data were analyzed using multiple regression analysis. The results of this study indicate that the practice of expropriation in Indonesia can be minimized by implementing adequate corporate governance. The results of this study also prove that companies whose shareholding structures are dominated by the family will maintain control in the company through their management so that they have an impact on limiting governance practices in reducing expropriation practices.

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