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Growing Science » Journal of Project Management » Cash holding and corporate governance on company financial performance: Case study of construction infrastructure project supporting industries on the Indonesian stock exchange

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Journal of Project Management

ISSN 2371-8374 (Online) - ISSN 2371-8366 (Print)
Quarterly Publication
Volume 9 Issue 4 pp. 457-470 , 2024

Cash holding and corporate governance on company financial performance: Case study of construction infrastructure project supporting industries on the Indonesian stock exchange Pages 457-470 Right click to download the paper Download PDF

Authors: Mariana Ing Malelak, Zeplin Jiwa Husada Tarigan, Sautma Ronni Basana, Ferry Jie

DOI: 10.5267/j.jpm.2024.7.003

Keywords: Cash holding, Corporate governance, Skills boards, Managerial ownership, Independent director, Manufacturing construction support company

Abstract: The Indonesian government currently focuses on high infrastructure development to prepare for connectivity between one city and another. The massive construction of the new government capital is also called the archipelago's capital. This condition impacts companies supporting construction projects, which are growing rapidly. This growth is supported by corporate governance and the cash-holding industry, which supports infrastructure projects for the company's financial performance. This research aims to determine the role of cash holding and corporate governance (board skill, independent director, managerial ownership) on the financial performance of infrastructure-supporting manufacturing companies in Indonesia. The sample used in this research was 83 manufacturing companies listed on the Indonesia Stock Exchange in the 2010-2020 period. This research uses panel data regression as a data analysis method. The results of this research show that managerial ownership significantly impacts increasing cash holding by maintaining the optimization of cash and cash equivalents. The company's managerial ownership cannot impact board skills because many companies still need to accommodate share ownership by management and board-skill-educated doctors. This condition also causes board size skills not to impact increasing cash holding in the company. Board skills have yet to be able to impact financial performance significantly. Managerial ownership and cash holding impact increasing return on assets, thereby increasing financial performance for manufacturing companies that support infrastructure projects. The independent director, as a variable moderator, still needs to be capable of moderating managerial ownership, board skill, and cash holding to improve financial performance. This condition is caused by data from several companies still needing more independent directors. Research provides a practical contribution to the owner as soon as possible, recruiting board members with doctoral education as competent board skills and making independent directors have a vital role in improving financial performance. The theoretical contribution to research is to enrich the theory of corporate governance and financial performance.



How to cite this paper
Malelak, M., Tarigan, Z., Basana, S & Jie, F. (2024). Cash holding and corporate governance on company financial performance: Case study of construction infrastructure project supporting industries on the Indonesian stock exchange.Journal of Project Management, 9(4), 457-470.

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Journal: Journal of Project Management | Year: 2024 | Volume: 9 | Issue: 4 | Views: 227 | Reviews: 0

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