Agency Costs, Corporate Governance and Ownership Concentration: The Case of Agro-industrial Companies in Indonesia

  •  Hastori Hastori    
  •  Hermanto Siregar    
  •  Roy Sembel    
  •  Tb. N Ahmad Maulana    


This study aims to investigate determinants of agency costs on agro-industrial firms that are listed in the Indonesian Stock Exchange (IDX). Modeling of agency costs is analyzed by performing regression analysis of panel data. This study employs secondary data of 54 companies from year 2010 to 2013. The results show that agency costs are affected by the effectiveness of good governance mechanism, especially the function of board of directors (BOD) and board of commissioners (BOC) in conducting their duties, dividend payout and leverage. Whereas, independent commissioners and auditor committee are not significant factors in mitigating agency costs. Ownership concentration affects agency costs in vary. The results can help management, investors and other decision makers to implement better governance practices in agro-industrial firms in Indonesia.


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