The Influence of Managerial and Institutional Ownership as Well as Debt Policies on Dividend Policies and the Value of Foreign Investment Manufacturing Companies in the Indonesia Stock Exchange
Introduction
The Indonesia Stock Exchange (IDX) has become a significant platform for foreign investment manufacturing companies (PMA) to raise capital and expand their business operations. However, the IDX has also faced challenges in ensuring that PMA companies adhere to sound corporate governance practices and dividend policies that benefit shareholders. This study aims to examine the effect of managerial and institutional ownership, as well as debt policies on dividend policies and the value of PMA manufacturing companies listed on the IDX during the 2008-2011 period.
Background
The IDX has been growing rapidly in recent years, with the number of listed companies increasing significantly. However, the IDX has also faced challenges in ensuring that listed companies adhere to sound corporate governance practices and dividend policies that benefit shareholders. The IDX has implemented various regulations and guidelines to promote good corporate governance practices among listed companies. However, the effectiveness of these regulations and guidelines in promoting good corporate governance practices and dividend policies among PMA manufacturing companies remains unclear.
Methodology
This study involved 68 PMA manufacturing companies as populations, and 20 companies were chosen as samples with probability sampling techniques. The data analyzed included a period of four years, so that the total observation reached 80. Quantitative methods with path analysis (path analysis) using the SPSS program were applied in this study. This study uses two sub-structures of equation:
First Equation : Analyzing the effect of managerial and institutional ownership, as well as debt policies on dividend policies.Second Equation : Analyzing the effect of managerial ownership, institutional ownership, debt policy, and dividend policy on company value.
Results
The results showed that institutional ownership and debt policy had a significant influence (α = 5%) on dividend policy and company value . High institutional ownership tends to encourage companies to distribute greater dividends, because investor institutions generally expect a stable and measured investment return through dividend. Aggressive debt policy also has a positive effect on dividend policy, because companies with high leverage tend to be more motivated to increase profitability and cash flow to meet debt obligations, so dividends become one of the mechanisms to increase company value.
On the other hand, managerial ownership does not show a significant effect on dividend policy and company value. This can be interpreted that managers in PMA manufacturing companies on the IDX do not always prioritize dividend distribution as a way to increase company value.
Implications
This research has some important implications. First, PMA manufacturing companies in the IDX need to pay attention to the role of institutional ownership and debt policy in determining dividend policies and increasing company value. Second, further analysis needs to be done to understand the reasons behind the unfavorable influence of managerial ownership on dividend policies and company value. This can involve internal factors such as ownership structure, corporate governance mechanisms, and manager motivation.
Conclusion
This research provides empirical evidence of the effect of institutional ownership and debt policy on dividend policies and PMA manufacturing companies in the IDX. This finding is expected to be a reference for investors, company management, and regulators in understanding and managing factors that influence dividend policies and company value.
Recommendations
Based on the findings of this study, the following recommendations are made:
PMA manufacturing companies in the IDX should pay attention to the role of institutional ownership and debt policy in determining dividend policies and increasing company value .Further analysis needs to be done to understand the reasons behind the unfavorable influence of managerial ownership on dividend policies and company value .Regulators and company management should implement policies and guidelines that promote good corporate governance practices and dividend policies among PMA manufacturing companies .
Limitations
This study has some limitations. First, the study only examined the effect of managerial and institutional ownership, as well as debt policies on dividend policies and the value of PMA manufacturing companies listed on the IDX during the 2008-2011 period. Second, the study only analyzed a limited number of variables, which may not capture the full range of factors that influence dividend policies and company value.
Future Research Directions
This study provides a foundation for future research on the effect of managerial and institutional ownership, as well as debt policies on dividend policies and the value of PMA manufacturing companies. Future research should aim to:
Examine the effect of other factors that influence dividend policies and company value , such as ownership structure, corporate governance mechanisms, and manager motivation.Analyze the effect of institutional ownership and debt policy on dividend policies and company value in other countries , such as the United States and China.Develop policies and guidelines that promote good corporate governance practices and dividend policies among PMA manufacturing companies .
Conclusion
In conclusion, this research provides empirical evidence of the effect of institutional ownership and debt policy on dividend policies and PMA manufacturing companies in the IDX. This finding is expected to be a reference for investors, company management, and regulators in understanding and managing factors that influence dividend policies and company value.Frequently Asked Questions (FAQs) on the Influence of Managerial and Institutional Ownership as Well as Debt Policies on Dividend Policies and the Value of Foreign Investment Manufacturing Companies in the Indonesia Stock Exchange
Q: What is the main objective of this study?
A: The main objective of this study is to examine the effect of managerial and institutional ownership, as well as debt policies on dividend policies and the value of foreign investment manufacturing companies (PMA) listed on the Indonesia Stock Exchange (IDX) during the 2008-2011 period.
Q: What are the key findings of this study?
A: The key findings of this study are that institutional ownership and debt policy have a significant influence on dividend policy and company value. High institutional ownership tends to encourage companies to distribute greater dividends, while aggressive debt policy also has a positive effect on dividend policy.
Q: What are the implications of this study?
A: The implications of this study are that PMA manufacturing companies in the IDX need to pay attention to the role of institutional ownership and debt policy in determining dividend policies and increasing company value. Further analysis is also needed to understand the reasons behind the unfavorable influence of managerial ownership on dividend policies and company value.
Q: What are the limitations of this study?
A: The limitations of this study are that it only examined the effect of managerial and institutional ownership, as well as debt policies on dividend policies and the value of PMA manufacturing companies listed on the IDX during the 2008-2011 period. The study also only analyzed a limited number of variables, which may not capture the full range of factors that influence dividend policies and company value.
Q: What are the recommendations of this study?
A: The recommendations of this study are that PMA manufacturing companies in the IDX should pay attention to the role of institutional ownership and debt policy in determining dividend policies and increasing company value. Further analysis is also needed to understand the reasons behind the unfavorable influence of managerial ownership on dividend policies and company value. Regulators and company management should also implement policies and guidelines that promote good corporate governance practices and dividend policies among PMA manufacturing companies.
Q: What are the future research directions of this study?
A: The future research directions of this study are to examine the effect of other factors that influence dividend policies and company value, such as ownership structure, corporate governance mechanisms, and manager motivation. The study also aims to analyze the effect of institutional ownership and debt policy on dividend policies and company value in other countries, such as the United States and China.
Q: What are the benefits of this study?
A: The benefits of this study are that it provides empirical evidence of the effect of institutional ownership and debt policy on dividend policies and PMA manufacturing companies in the IDX. This finding is expected to be a reference for investors, company management, and regulators in understanding and managing factors that influence dividend policies and company value.
Q: What are the practical implications of this study?
A: The practical implications of this study are that it can help investors, company management, and regulators to make informed decisions about dividend policies and company value. The study can also help to promote good corporate governance practices and dividend policies among PMA manufacturing companies in the IDX.
Q: What are the theoretical implications of this study?
A: The theoretical implications of this study are that it contributes to the existing literature on the effect of managerial and institutional ownership, as well as debt policies on dividend policies and company value. The study also provides a framework for understanding the complex relationships between these variables and their impact on company value.
Q: What are the policy implications of this study?
A: The policy implications of this study are that it can help regulators and company management to develop policies and guidelines that promote good corporate governance practices and dividend policies among PMA manufacturing companies in the IDX. The study can also help to improve the overall performance of PMA manufacturing companies in the IDX.