Relationship Between CEO Power and Firm Value: Evidence from Indonesian Non-Financial Companies

Kharisma Elfianda Hamidlal; Iman Harymawan

doi:10.24815/jdab.v8i1.17942

Relationship Between CEO Power and Firm Value: Evidence from Indonesian Non-Financial Companies

Kharisma Elfianda Hamidlal, Iman Harymawan

Abstract

This research aims to examine the relationship between the CEO power and firm value of non-financial companies listed on the Indonesia Stock Exchange during the 2014-2018 period. The samples are 322 observations and selected through purposive sampling method. Data was analyzed using multiple linear analysis methods. The results uncovered that ownership power, expert power and prestige power have a positive relationship with firm value. The most probable reasons could be that CEO share ownership encourages better decision-making process that contribute to enhanced corporate value. A longer tenure as a CEO signals high professionalism and expertise of the CEO that led to improved decision quality made by the CEO.

Keywords

CEO power; firm value; ownership power; expert power; prestige power

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DOI: https://doi.org/10.24815/jdab.v8i1.17942

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Accounting Department collaborated with IAI KAPd (Institute of Indonesia Chartered Accountant)
Faculty of Business and Economics
Syiah Kuala University
Kopelma Darussalam, Banda Aceh, Indonesia - 23111
ISSN: 2355-9462, E-ISSN: 2528-1143

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