Submitted as Partial Fulfillment of Requirement for the Degree of Sarjana

CORPORATE RISK-TAKING: EVIDENCE FROM INDONESIA

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  SKRIPSI Submitted as Partial Fulfillment of Requirement for the Degree of Sarjana

  Ekonomi (SE) at the Universitas Sebelas Maret By: WIDOWATI DIAN PERMATASARI F0310086 FACULTY OF ECONOMIC AND BUSINESS SEBELAS MARET UNIVERSITY SURAKARTA 2014 commit to user

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commit to user MOTTO Man Jadda Wa Jadda, Man Shabara Zhafira, Man Sara Ala Darbi Washala.

  (Negeri 5 Menara) The mind is everything. What you think, you become.

  (Buddha) It’s my life. It’s now or never (Bon Jovi) You shoot me down but I won't fall, I am titanium.

  (David Guetta) It's not about what you've done, it’s about what you doing.

  It's all about where you going, No matter where you've been.

  Let's go! Make no excuses now.

  (Calvin Harris) commit to user

DEDICATION

  This skripsi and whatsoever success that I could achieve is dedicated to ϖ My mom, my dad, my little brother and all my beloved big family.

  ϖ My supervisor and all lecturer Faculty of Economic and Business UNS ϖ My best friends

  There is no kindness love like your true love. Thanks for the support and pray for me all the time. commit to user

  ACKNOWLEDGEMENT

  Researcher will be grateful to Allah SWT for all the mercy and bless so that I was able to finish this research well.

  This Skripsi is proposed to complete all the requirements of achieves the degree of Sarjana Ekonomi of Accounting Department, Sebelas Maret University, Surakarta.

  Researcher realizes that she could not have finished this skripsi without the supports and involvement of many parties both directly and indirectly. I owe a very great debt and thanks to:

  1. Dr. Wisnu Untoro, M.S., as the Dean of Economics Department, Sebelas Maret University, Surakarta.

  2. Drs. Santoso M.Si., Ak., as the Head of Accounting Department,Sebelas Maret University, Surakarta.

  3. Drs. Muh Agung Prabowo, M.Si., Ph.D, Ak., as my supervisor. I wish to express my deepest thanks to Mr. Agung for his considerable help to give advices and a very closely improved result.

  4. Prof. Dr. Rahmawati, M.Si., Ak., as my academic advisor, thanks for all your support and advices.

  5. Agung Nur Probohudono SE., M.Si., Ph.D., Ak and Sri Hantoro SE., MSc., Ak. as my informal advisor. Thanks for inspire and help me through several issues to finish my skrpisi

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  6. All lectures and staff in Faculty of Economics, Sebelas Maret University who have provided knowledge, guidance, and service.

  7. My father as my best role model, my mother as my mood booster and my truthful brother, thanks for being the most wonderful family in the world.

  Also my beloved grandma, uncle Sabar and aunt Diah for the support.

  8. M. Andy Bayu, Retnia Wulandari, Aldy Fariz, Tika Triwik, for assist me making this skripsi even better.

  9. My super awesome friends Amalia Dewi Latifah, Okki Carolina, Fitri Setyowati, Merinta Bella, and Okfidsa Java whose always right beside me through the good time and bad time.

  10. My second family in Solo, Pradityo Abi Karami, Golda Belladonna, Anis Ratnasari, Sandi Pratomo, and Putra Satria, thanks for teach, and take care of me through my transition period.

  11. My trusted friend Prasetya Adi, thanks for being the best light ever.

  12. My partner in crime Meri, Rio & Diah, Indro, Jon, Kholid, Bayu, and Yogi, keep fighting guys!

  13. All BEM’s committees, especially Abdika, Aldy, Aji, Ben, Binta, and Ibnu.

  It’s been an honors to take responsibility as “the heart of BEM”

  14. My staff in Social Political Bureau Opang, Mono, Nugroho, Devi, Ria, Bimo, Della, Khori. Thank you for trust me to lead incredible person like you all.

  15. All HMI’s members Wisnu, Dedi, Bagus, Aryo, Afe, Lilis, Dian, Ibnu, Budi, Biber, Gery, Cholid, Dikna, Pepeng, Sari, yakusa!

  16. The next generation of KSB Pepeng, Hessy, Juno, Zaky and others, go ahead guys!

  17. All of my friends in HMJ Akuntansi, who is the best? Accounting Society!

  18. All of my friends in Accounting Department, I am happy to have you all in the last four years. I wish that graduation is not the end of our friendship.

  19. FIRRATION - fifth generation of acceleration of SMA N 1 Klaten

  20. For all people that Researcher could not mention one by one, I thanks for all your support in the last four years.

  Researcher realizes that this research is far from being perfect. This study has a lot of constraint, thus any suggestions and critics are expected for the sake of improving this study.

  As I close this acknowledgment, I expect that this writing will be useful to all parties.

  th

  Surakarta, March 28 , 2014 Widowati Dian Permatasari

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  TABLE OF CONTENTS

  Page PAGE OF TITLE i

  PAGE OF ADVISOR‘S APPROVAL ii PAGE OF APPROVAL iii

  PAGE OF MOTTO iv

  PAGE OF DEDICATION v

  PERNYATAAN vi

  ACKNOWLEDGMENT vii

  TABLE OF CONTENT x

  LIST OF TABLES xii

  LIST OF APPENDIXES xiii

  ABSTRACT xiv

  ABSTRAK xv

CHAPTER I. INTRODUCTION

  1 A. Research Background

  1 B. Research Question

  4 C. Research Objectives

  4 D. Research Benefits

  5 CHAPTER II. THEORETICAL FRAMEWORK

  6 A. Agency Theory

  6

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  B. Corporate Risk-Taking

  7 commit to user

  C. Ownerships

  25 B. Classic Assumption Analysis

  37 REFERENCES

  37 C. Recommendations

  36 B. Research Constraints

  36 A. Conclusion

  29 CHAPTER V. CONCLUSION AND RECOMMENDATION

  26 D. Hypothesis Analysis

  25 C. Descriptive Statistics Analysis

  25 A. Data Description

  9 D. Board of Commissioner

  20 CHAPTER IV. DATA ANALYSIS

  17 E. Data Analysis Methods

  17 D. Variable and Measurement Techniques

  16 C. Source and Data Gathering Technique

  16 B. Population and Sample

  16 A. Research Design

  11 CHAPTER III. RESEARCH METHODS

  10 E. Hypothesis Development

  39 APPENDIXES

  

LIST OF TABLES

  TABLE PAGE

  3.1 Description of Equation on Regression Analysis

  23

  4.1 Research Population and Sample

  25

  4.2 Descriptive Statistics

  26

  4.3 Multiple Linier Regression

  29

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LIST OF APPENDIXES

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  Appendix I List of Companies Appendix II Ownerships, Board Composition

  Taking and Corporate Risk- Appendix III Descriptive Statistics Appendix IV Classic Assumption Test Appendix V Pearson Correlation Appendix VI Results of Linear Regression

  ABSTRACT

CORPORATE RISK-TAKING: EVIDENCE FROM INDONESIA

Widowati Dian Permatasari

NIM F0310086

  This research aim to investigate the impact of government and foreign ownership, board of commissioner size and board of commissioner compositions (i.e. women representation on board, board with economic educational background and board average age) on corporate-risk taking behavior. Corporate risk-taking proxies by earning volatility within annual report. This research use a sample of 57 state-owned enterprises and 68 listed firm in Indonesia Stock Exchange over 2010-2012.

  This paper document significant negative association between government ownership, board of commissioner size, women representation on board, and board with economic educational background to corporate risk-taking in Indonesia. In the other hand, foreign ownership and board average age has no significant effect to corporate risk-taking.

  Keywords : Corporate Risk-Taking, Earning Volatility, State-Owned Enterprises, Government Ownership, Foreign Ownership, Board of Commissioner Size, Board of Commissioner Composition.

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ABSTRAK

CORPORATE RISK-TAKING: EVIDENCE FROM INDONESIA

Widowati Dian Permatasari

NIM F0310086

  Penelitian ini dilakukan untuk menguji pengaruh dari kepemilikan

pemerintah dan kepemilikan asing, ukuran dewan komisaris dan komposisi dewan

komisaris (terdiri dari jumlah wanita pada dewan komisaris, dewan komisaris

dengan latar belakang pendidikan ekonomi dan rata-rata umur dewan komisaris)

terhadap pengambilan risiko di perusahaan. Tingkat pengambilan risiko di

perusahaan diproksikan dengan volatilitas pendapatan yang terdapat pada

laporan keuangan perusahaan. Sample penelitian ini menggunakan 57 Badan

Usaha Milik Negara (BUMN) dan 68 perusahaan perusahaan umum yang listing

di Buesa Efek Indonesia selama periode 2010-2012.

  Hasil penelitian ini menunjukkan bahwa kepemilikan pemerintah, ukuran

dewan komisaris, jumlah wanita dalam jajaran dewan komisaris dan dewan

dengan atar belakang pendidikan ekonomi memiliki pengaruh negatif yang

signifikan terhadap pengambilan risiko di perusahaan. Di sisi lain, kepemilikan

asing dan rata-rata umur dewan komisaris tidak memiliki pengaruh yang

signifikan terhadap pengambilan risiko di perusahaan.

  Kata Kunci : Pengambilan Risiko Perusahaan, Volatilitas Pendapatan, Badan Usaha Milik Negara, Kepemilikan Pemerintah, Kepemilikan Asing, Ukuran Dewan Komisaris, Komposisi Dewan Komisaris commit to user