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., H., Inayatul Fadilah, W., & Zulaikha, S. (2019). Does Diversification and Executive Compensation Affect Corporate Values in Family Firm: Case of Indonesia. KnE Social Sciences, 3(13), 1277–1293. https://doi.org/10.18502/kss.v3i13.4284

https://doi.org/10.18502/kss.v3i13.4284

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authors

  • Habiburrochman .
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  • W Inayatul Fadilah
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  • S Zulaikha
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Published Date

  • Mar 31, 2019

Does Diversification and Executive Compensation Affect Corporate Values in Family Firm: Case of Indonesia

KnE Social Sciences / The 2nd International Conference on Islamic Economics, Business, and Philanthropy (2nd ICIEBP) / Pages 1277–1293

Abstract

Free trade in the Asia-Pacific region (AFTA) and Southeast Asia (MEA) becomes a challenge for family firms in developing their business activities. Strategies that can be taken by family firms to cope with existing market pressures can be pursued by implementing a diversification and compensation strategy. This study aims to explain and analyze the influence of diversification in related models, diversification on unrelated models, and executive compensation to firm value. In this study the population taken is a family firm in the manufacturing sector listed on the Indonesia Stock Exchange during the year 2012-2016 amounted to 140. The important finding of the research is that the diversification in the related model has no significant effect on firm value, the diversification on the unrelated model has no significant effect on firm value, the executive compensation in the related diversified company has a significant negative effect on firm value, then the executive compensation on the unrelated diversified company has a significant positive effect on the value of the company


 


 


Keywords: Related Diversification, Unrelated Diversification, Executive Compensation, Firm Value, Family Firm

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