Model Selection in Panel Data Regression

74 board of director is positive, it means the larger board size of director will provide a form of control over the company’s performance is getting better and generated good profitability that will be able increase its share price and the firm value also increase. Board size is the number of board of directors of the company which is generally composed of inside and outside members and responsible to run company’s business. The result of this research is consistent with the research that had conducted by Isshaq 2009 and Weterings 2011 where there is positive influence between board size between toward firm performance. b. Size of Audit Committee Size of audit committee has the probability value is 0.0486 0.05. The result shows that size of committee audit variables is influence the firm performance. The coefficient size of committee audit is positive, it means the larger audit committee can monitors more mechanisms that improve quality of information flows between shareholders and managers. Audit committee is a committee established by and among the board of directors of a company for the purpose of overseeing the accounting and financial reporting processes of the company and audits of the financial statements of the company; if no such committee exists with respect to a company, the entire board of directors of the company 75 The result of this research is consistent with the research that had conducted by Gill and Obradovich 2012 where there is positive influence between board size between toward firm performance. c. Family Ownership Family ownership has the probability value is 0.3533 0.05. The result shows that family ownership variables is uninfluence the firm performance. It means that the significant relationships between ownership variables and firm performance may be limited to large, listed family firms. Family involvement in ownership and management is one of the main protagonists influencing the corporate governance of family owned companies. Ownership concentration could not have a perceptible effect on the company performance, inefficient ownership structures might fail over the long run. The result of this research is consistent with the research that had conducted by Sciascia and Mazzola 2008 where there is no significant linear between family ownership toward firm performance. d. Family DirectorManager Family directormanager has the probability value is 0.4018 0.05. The result shows that family directormanager variables is uninfluence the firm performance. It means that identification of family members in management is difficult as family relationships are not required to be disclosed in most markets so the are limited accessed this information by surveying management. Family firms usually represent 76 the characteristic of being founded by a family entrepreneur owning most shares in the company. When at the start-up phase they have few numbers of employees, where informal behavior is adopted along with a centralized decision making power, and fewer hierarchical levels. Founders of family firms will feel that they have more direct control over the behavior of employees, as well as the ability to directly export cultural and ethical guidelines to the company through their own behavior. The result of this research is consistent with the research that had conducted by Chen, Grey and Nowland 2011 where there is no significant linear between family family directormanagement toward firm performance. 2 The Influence of Good Corporate Governance and Family Involvement Variables Toward Firm Performance F-Test F-test used to measure, do the independent veriables simultaneously influence the dependent variable. The hypothesis for this test is : H = the independent variable are simultaneously not influence the dependent variable H 1 = the independent variable are simultaneously influence the dependent variable H is rejected if F statistic α. The result of F-Test can be seen in the following table: