Managerial Ownership to Firm Performance Institutional Ownership to Firm Performance

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3. Managerial Ownership to Firm Performance

There also research has done by Haryani et al. 2011 they find that the managerial ownership does not influence on firm performance in Indonesia caused by the structure of managerial ownership in Indonesia is still very small compared to the institutional ownership of corporations listed on the Indonesia Stock Exchange. With small holdings, the managers do not feel they have the company so that the companys performance. Thus, managerial ownership has not been able to be a mechanism that increases the company performance. Different with the results that done by Ali, Salleh Hassan 2008 investigated the factor influencing firm performance by considering only non- financial companies based on the reason that the financial sector is subject to certain regulation and different from other industry. The study analyzed 1000 Bursa listed companies from 2000 to 2003 and proved positive relationship between managerial ownership and firm performance. Furthermore, Amyulianthy 2012 also found that the managerial ownership has influenced firm performance. H3: The Managerial Ownership influence the Firm Performance 41

4. Institutional Ownership to Firm Performance

These findings from Hapsoro 2008 Wulandari 2006 which found that institutional ownership does not affect the company performance because the majority owner of the institution involved in the control of companies that tend to act in their own interests although sacrifice the minority owners. According To Modigliani 1958:290 existence asymmetries information between the shareholders with manager and cause that the company manager will be able to control of the company because it has information that the financial statements more than the shareholders, it will be easier for the manager to control the company in making a policy. So, with high institutional ownership it cannot guarantee full monitoring managers with maximum performance. These results are also consistent with research conducted by Erkens et al. 2012 Sabrinna 2010 that institutional ownership does not affect the company performance. But some other previous studies conducted by Yonnedi Yulia 2011, Zeitun Tian 2007, Mahoney Roberts 2007 found that the institutional ownership has influenced the firm performance measure by Return on Assets. Crutchley Hansen 1999, concluded that the larger institutional ownership can make an effect a higher company performance. H4: The Institutional Ownership influence the Firm Performance 42

CHAPTER III RESEARCH METHODOLOGY

A. Scope of Research

This research is empirical study of hypothesis testing with using causalities research method to determine the effect between the independent variables variables that effect and the dependent variable the variable that is effected. The independent variable in this research is The Size of Board Director BOD, The Size of Board of Independent BOI, Managerial Ownership MO and Institutional Ownership IO. The dependent variable in this research is The Firm Performance as measured by Return on Assets ROA. This study aimed to examine the influence of Good Corporate Governance implementation towards the Firm Performance, the study on manufacturing companies listed in the Malaysian Stock Exchange period 2010-2014. This is because the researchers wanted to try to determine how the application of good corporate governance in other countries, especially developed country. This research is a quantitative research. It takes place in Malaysian Stock Exchange MDX with the manufacturing company as the research object. The type of data used in this research is secondary data. The Size of Board of Director BOD, The Size of Board of Independent BOI, Managerial Ownership MO and Institutional Ownership IO and The Firm Performance ROA are taken from the financial report of the manufacturing company listed in Malaysian Stock Exchange period 2010-2014.