Does An IPO Create Better Corporate Governance? (Empirical Evidence from an Indonesian Islamic Bank)

DOI

10.2991/apbec-18.2019.47How to use a DOI?

Keywords

IPO, corporate governance, disclosure, Islamic bank

Abstract

This research is aimed to serve as an exploratory research on the impact of IPO on corporate governance practices. Drawn from a content analysis using the ASEAN Corporate Governance Scorecard of an Indonesia Islamic Bank as a case study, the findings show significant changes in the governance score of the bank. The changes mainly come from the aspect of the responsibilities of the board and disclosure and transparency. The increasing voluntary disclosure can be explained by the agency theory that the bank is now facing higher agency problem after going public, thus more information is disclosed to reduce the information asymmetry. Even though generalizability is not the main objective of this study, the findings can provide evidence on how a company responds to a greater pressure from stakeholders, especially the shareholders and investors, after an IPO decision. This study aims to provide empirical evidence about the effect of ownership structure on the tendency of firms to conduct tunneling practices. Tunneling is a form of misappropriation in related-party transactions that harms minority shareholders. The samples employed are companies listed on the Indonesia Stock Exchange from 2013 to 2015 that disclosed related-party transactions affecting assets and liabilities. The study argues that concentrated family ownership and concentrated government ownership have a positive effect on firm tunneling practices, while concentrated institutional ownership and dispersed ownership have a negative effect. Concentrated family ownership has a significant positive effect on firms’ tunneling practices, while concentrated government ownership, concentrated institutional ownership, and dispersed ownership have a significant negative effect on a firm’s tunneling practices.

Copyright

© 2019, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Huda Aulia Arifin
AU  - Desi Adhariani
PY  - 2019/07
DA  - 2019/07
TI  - Does An IPO Create Better Corporate Governance? (Empirical Evidence from an Indonesian Islamic Bank)
BT  - Proceedings of the Asia Pacific Business and Economics Conference (APBEC 2018)
PB  - Atlantis Press
SP  - 349
EP  - 352
SN  - 2352-5428
UR  - https://doi.org/10.2991/apbec-18.2019.47
DO  - 10.2991/apbec-18.2019.47
ID  - AuliaArifin2019/07
ER  -