PENGARUH STRUKTUR KEPEMILIKAN DARI CORPORATE GOVERNANCE PADA BADAN USAHA PUBLIK YANG TERDIVERSIFIKASI DAN TIDAK TERDIVERSIFIKASI DALAM HUBUNGANNYA DENGAN LAYANAN BAGI PIHAK INTERNAL DAN EKSTERNAL BADAN USAHA

Abstract

The stakeholders of the firm have the same objective to the survival of the firm. In order to survive, the firm can diversify its line of business. Through diversification the firm gets several benefit, such as financial synergy, increasing debt capacity, and earning stability. However, there are possibilities that the managers do the diversification for their personal intention, such as prestige, higher compensation, and risk-shelter. Since there is a difference between the goal of shareholders and managers, then it will induce the agency conflict. Therefore diversification could have positive and negative side to the firm. The strategy of doing diversification is influenced by ownership structure and corporate governance. The proxy for corporate governance are leverage, size of the firm, growth opportunity, and financial performance. This research try to test the influence of both factors above by using logit regression model. The result is that only size of the firm gives a siginifcant influence to the diversification strategy. The possible explanations are still few public firms do diversification, many firms are owned by family member, and there are nonfinancial factors, such as the composition of board of directors