Determinants of Corporate Performance in Indonesia

Penulis/Peneliti : A. Prasetyantoko & Rachmadi Parmono

Bidang Penelitian : Strategic Management

Jurnal :

Volume :

Tahun : 15 March 2007

This paper is concerned on the factors determining corporate performance due to financial crisis in Indonesia. The result is fairly interesting in which firm size is positively related to firm fundamental value of the firm, whereas it is not related to market value of the firms. By employing panel data of 238 listed companies in Jakarta Stock Exchange in the period of 1994 – 2004 for our samples, we also find that macro factors are more pertinent variables inducing firm performance, rather than firm-specific factors. It could be due to the great disruption related to the 1997 financial crisis. Our results shows that institutional factor matters on firm performance, since firms with majority foreign ownership have much higher performance in both measurements, namely return on asset (ROA) and market capitalization growth. Ordinary Least Square (OLS) is employed for estimation procedures in this paper.


Keywords: firm performance, firm strategy and financial crisis

JEL Classification: E32 (Prices, Business Fluctuations, and Cycles), L1 (Market Structure, Firm Strategy, and Market Performance)

Paper Presented at The 4th UBAYA International Annual Symposium on Management, Surabaya, 15 March 2007.