The Role of Managerial Ownership on Impact of Corporate Diversification Strategies and Capital Structure to Corporate Performance Domestic Companies (DCs) at the Indonesia Stock Exchange
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Abstract
This study aimed to examine the effect of decisions of corporate diversification strategy and capital structure on firm performance by managerial ownership variable as a moderating variable. Type of this research is quantitative research and using purposive sampling to conduct sampling is based on judgment sampling.
Technical analysis used in this study is Partial Least Square (PLS) analysis through several stages: calculating the value of the indicator variable as a proxy variable interactions moderation, perform outer model testing, perform inner model testing, goodness of fit (GoF) index testing, and tests of significance to accept or reject the hypothesis through bootstrapping procedure.
The results of this study indicate that: diversification strategy the company adopted has a positive and significant effect on firm performance, diversification strategy also has a positive and significant effect on the company's capital structure, capital structure has a positive and significant effect of any changes in the company's performance, and results of this research does not support previous research that most of the finding of the capital structure has a negative and significant effect on firm performance, managerial ownership has a negative and significant effect on the company performance so that when high levels of managerial ownership will actually reduce the level of company performance and vice versa. Directly, managerial ownership as a moderating variable that is a proxy in the interaction variables has no significant effect on firm performance, managerial ownership has a moderating variable is not a significant role for the impact on diversification strategy and capital structure are applied to get the company performance.
Keywords
Managerial Ownership, Corporate Diversification Strategies, Capital Structure, Corporate Performance, Partial Least Square (PLS).
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