Stock returns and financial performance as mediation variables in the influence of good corporate governance on corporate value
ISSN: 1472-0701
Article publication date: 4 September 2019
Issue publication date: 19 November 2019
Abstract
Purpose
This paper aims to examine the influence of good governance on corporate value, in which the stock returns and financial performance act as the mediator of the relationship among them.
Design/methodology/approach
This research was conducted on companies go public listed on the Indonesia Stock Exchange and was included in 2011 to 2017 LQ45 index list, with samples taking a purposive sampling approach through four criteria. Data analysis using WarpPLS with indicator approaches are formative (mutually exclusive between indicators).
Findings
The findings are as follows: good corporate governance has a significant influence on stock returns in a negative direction; good corporate governance has no significant influence on financial performance; good corporate governance has no significant influence on company value; stock returns have a significant influence on financial performance in a positive direction; financial performance has a significant influence on stock returns with a positive direction; stock returns significantly influence the value of the company in a positive direction; financial performance has a significant influence on the company value in a positive direction.
Originality/value
The novelty in this study is that the relationship between stock returns and financial performance is reciprocal, which is the relationship among variables that affect each other (back and forth causality), in which in the previous study, the relationship between variables is only one direction; besides, the previous study conducted an analysis to find out the influence of good corporate on stock returns, company value and financial performance separately, with mixed results.
Keywords
Acknowledgements
Expression of Concern: The publisher of Corporate Governance is issuing an Expression of Concern for the following article Kurniati, S. (2019), “Stock returns and financial performance as mediation variables in the influence of good corporate governance on corporate value”, published in Corporate Governance, Vol. 19 No. 6, pp. 1289-1309, to inform readers that credible concerns have been raised regarding the authorship of this paper. An investigation is ongoing and is currently unresolved. Further information will be provided by Corporate Governance as it becomes available.
Citation
Kurniati, S. (2019), "Stock returns and financial performance as mediation variables in the influence of good corporate governance on corporate value", Corporate Governance, Vol. 19 No. 6, pp. 1289-1309. https://doi.org/10.1108/CG-10-2018-0308
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited