Construction and Building Companies’ Performance as the Intervening Variable of the Good Corporate Governance effects on Firm Value

Abstract

Good Corporate Governance (GCG) plays an important role in the company. Companies that have proven to pay attention to organizational systems tend to have good governance as well. If this has been implemented properly then it can foster a good relationship with stakeholders. However, in reality, there are still many companies that have not been able to implement good GCG, so problems arise in their management system. This study aims to determine whether the effect of GCG on Companies’ Value with Financial Performance as an Intervening Variable in Construction and Building Companies listed on the Indonesia Stock Exchange (IDX) 2018-2021. GCG is proxied by Institutional Ownership, Institutional Ownership is proxied by Market to Book Value (MBV), and Financial Performance is proxied by Return on Equity (ROE). This is a quantitative research using purposive technique and construction and building companies listed on the IDX. The data is analysed using the Statistical Product and Service Solution 25 (SPSS 25) program. The results are to be viewed partially on GCG indicator that is proxied by institutional ownership, it has no positive effect on firm value, institutional ownership has no positive effect on firm value, GCG indicators obtained by institutional ownership have a positive effect on financial performance, while viewed from financial performance has no positive effect on firm value, also financial performance cannot be seen as a positive influence on firm value. Firm value and financial performance cannot mediate institutional ownership on firm value.