CHAPTER II

LITERATURE REVIEW

2.1. Good Corporate Governance (GCG)

Corporate governance issues is rising since the separation of the ownership

and the management (Jil and Aris Salomon, 2004). Tricker (1994) argued, the

managing power of corporation come from the ownership. The owner is

expected to run the corporation based on their investment value. And therefore,

the owner will delegate the power to the professional team known as the

management team to supervise the investment.

The separation power of the owner and the management team creates a

problem named agency problem. This problem occured because there is a

dominant position of the management who operates and controls daily operation

of the corporation. Sometimes they act beyond the limits and forget the ultimate

purpose of maximizing shareholders value. This contradiction needs to be solved

by the existence GCG practices.

As a popular concept nowadays, GCG has not only one single definition.

GCG is a principal underlies a process and corporate mechanism based on the

Peraturan Perundang-undangan and business ethics. And according to Cadburry

Committee on Cadburry Report (1992), GCG is a principal that direct and

control a corporation to achieve balancing between power and authority in their

responsibility to the shareholders. A group of developing countries,

Organization for Economic Cooperation and Development (OECD) also stated

GCG as the way of management responsible to their shareholders by responsible

decision and having the value added. And last, Forum for Corporate Governance

9
 in Indonesia (FCGI) defines corporate governance as a set of rules which

regulate relation among shareholders, management, creditor, government,

employees, and internal and external relations. In other words, corporate

governance is a system that regulates and controls a corporation.

Definitions above conclude that the importances aspects of GCG are the

balance of corporate components, fulfilled the responsibilities to the

shareholders, fulfilled shareholders rights of information and decision, and

equitable treatment of the shareholders. Gede Raka in the book of The Power of

Corporate Governance stated that a corporation is a human institution includes

people with value, dreams, identity and social responsibilities. GCG concept

reflect the importance of sharing, caring, and conserve which be as the deepest

aspect of GCG. Basically, corporate governance is primarily concerned with

finding a solution to the principal-agent problem. The principal, is seeking ways

to ensure the agent (management) handle their investment in such a way as to

guarantee maximum returns for them as investors and other stakeholders

(Agarwal and Knoeber, 1996).

Purpose of GCG is to create and maximize the value added for all

shareholders. Theoritically, GCG practice increases firm value by increasing

firm performance and lowering down the possibility of risk occured from the

self-benefit decision by the board members. In overall, GCG could increase

investors trust (Tjager, et al., 2003).

2.2. Basic Theories and Studies Related to GCG

Two basic theories related to GCG are stewardship theory and agency theory.

10
2.2.1. Stewardship Theory

Stewardship theory was created based on philosophy assumption of

the nature of man who is essentially trustworthy, able to act in good faith

in the interest of others with integrity and honesty (Donaldson and Davis

1988). In other words, stewardship theory considered management do their

job honestly for the public and shareholders interest.

Davis, Schoorman, & Donaldson (1997) argue related to the theory,

that the managers or executives of a company are stewards of the owners,

and both groups share common goals. Therefore, the board should not be

too controlling, as agency theories would suggest. The board should play

a supportive role by empowering executives and, in turn, increase the

potential for higher performance (Hendry, 2002; Shen, 2003). This theory

further argue for relationships between board and executives that involve

training, mentoring, and shared decision making (Shen, 2003;

Sundaramurthy & Lewis, 2003).

2.2.2. Agency Theory

Agency theory arise from the distinction between the owners

(shareholders) of a company designated as "the principals" and the

executives hired to manage the organization called "the agent." Agency

theory argues that the goal of the agent is different from that of the

principals, and they are conflicting (Johnson, Daily, & Ellstrand, 1996).

Berle and Means (1932) contended that managers did not have the same

interest and motivation as the owners to make full and efficient use of the

11
 corporate assets. The view of man taken by agency theory is contrasted to

the stewardship theory. In this theory, managers could not be trusted to act

in the public good in general and in the interest of the shareholders in

particular. Briefly, managers could not be trusted to do their job which of

course is to maximize shareholder value (Tricker).

Agency theory had wider responses from the society because it closely

reflects reality. According to this theory, corporate management need to

be supervised and controlled to make sure the business ran based on the

regulations. This effort creates costs to reduce the possibility of

disobedience which known as the agency costs. Agency costs includes cost

of shareholders supervision, management cost to provide transparant

financial report, and audit and internal control cost.

Comparation between the activity of corporate governance and

corporate management describes that corporate governance focused on

supervise and accountability aspect. Hence, corporate management

focused on controlling decision and operational management.

2.3. Good Corporate Governance (GCG) General Principles

Good Corporate Governance (GCG) general principles consist of five basic

principles as stated by National Committee on Governance Indonesia. It

includes Transparency, Accountability, Responsibility, Independency, and

Fairness (TARIF).

12
2.3.1. Transparency

Transparency obligates an open information that is published in

time, clear, complete, and comparable. It concerns financial, management,

operational performance, and ownership informations. To preserve and

maintain the objectivity in practicing business, a company must provide

material and relevant information that are easily accessible and

understandable by stakeholders. According to the regulation of Indonesia

capital market, material and relevant means informations which affect the

fluctuation of corporate share price then will affect the risk and prospect of

the corporation. A company must take the initiative to disclose not only the

issues mandated by laws and regulations, but also other information deemed

necessary by shareholders, creditors and other stakeholders to form a

decision.

Benefits of the application of transparency are shareholders could

know the possibility of risk occured in doing transactions to the corporation.

Hence, there will be the possibility of market efficiency and avoid the

conflict of interest among parties in the management team.

2.3.2. Accountability

Accountability is a set of clear function, structure, system, and

responsibilities of corporate organs so that the corporate management could

work effectively. It includes the clear format of rights, obligations, and

responsibilities among shareholders, commissioners and directors. This

13
complete function will avoid any problem related to the division of authority

and agency problems occured.

A company must be accountable for its performance transparently and

fairly. Thus, a company must be managed in a proper and measurable

manner, in such that it is aligned with the interest of a company by also

considering the interest of shareholders and other stakeholders.

Accountability is a prerequisite to achieve sustainable performance.

2.3.3. Responsibility

A company shall abide by laws and regulations and fulfill its

responsibility to the communities and environment for the purpose of

maintaining long term sustainability of the business and to be recognized as

a good corporate citizen.

2.3.4. Independency

To accelerate the implementation of the GCG principles, a company

must be managed independently with an appropriate balance of power, in

such a manner that no single company’s organ shall dominate the other and

that no intervention from other party shall exist.

Independency is crucial in decision making process. Lost of

independency in decision making means the lost of objectivity, and will be

terrible if corporate importance have to be seconded. To increase

independency in business decision, corporate should develop some rules,

14
 guidances, and practices in corporate board especially in the level of Board

of Commissioners and Directors.

2.3.5. Fairness

Fairness simply defines as an equitable manner of all shareholder rights

as written in the agreement and the Peraturan Perundang-undangan. Fairness

involves clear rights of capitalists, law system, and the establishment of

regulation to protect shareholder rights and avoid any fraudulence activities.

There will be benefits of the execution of this principal, corporate assets

are managed in prudent which hence will provide protection to shareholder

rights. Fairness is expected to avoid any form of corporate harm activities.

Shortly, it could guarantee fairness among interests in corporation.

2.4. Factors Defining The Success of Good Corporate Governance (GCG)

There are factors defining the success of GCG practices, internal factor and

external factor.

1. Internal Factor

Internal factor is the success factors from the inside of corporation,

includes corporate culture, which support GCG practices in mechanism

and management work system in the corporation, rules and regulation

related to the GCG practices, corporate risk management, effective audit

system to reduce the possibility of fraudulent activity, and information

disclosure to public.

15
 2. External Factor

External factor is every factors from the outside of corporation which

affect the success of GCG practices. It includes law system to guarantee

the effective and consistent supremacy of law. Besides, other support

from public sector or government institution also affect GCG success.

Best practices of the practices is needed as the benchmark to build social

value in the society. Moreover, the spirit of anticorruption in Indonesia

is also important followed by the construction of education which hence

will wider the jobfield.

Despite of two factors above, the other aspects to support GCG practices

effectively are quality, skill, credibility, and integrity from all parties in the

corporation.

2.5. Indicator of Good Corporate Governance (GCG)

There are four main points in measuring GCG practices in Korea based

on the study of Black, Jang, Kim (2003). Some factors affecting GCG are

shareholder rights, board of commissioners and outside commissioners,

audit committee, disclosure and ownership parity.

2.5.1. Shareholder Rights

Sylvia Veronica Siregar (2017) in the book of Corporate

Governance in Developing and Emerging Markets had explained

basic shareholder rights such as secured ownership registration,

having adequate information on timely and regular basis, and

transferring shares, particiapating and voting in general meeting,

16
 removing board member, and sharing profit of the corporation

(OECD, 2015). Balance of ownership structure and rights and

providing shareholder rights properly will increase their prosperities

and wealths. And it will increase their demand of buying shares which

affect to the rising share prices in the market. Each shareholder have

to know their rights and consult each other to form good corporate

governance.

Efendi (2015) stated, share prices showed firm value, if one

increases, others will increase too. In other words, share price

increases caused by one of the factor of the shareholders prosperity

and it will be achieved by fulfilling their rights. Therefore, fulfilled

shareholder rights, higher their prosperity, will rise corporate share

prices and the firm value.

2.4.2. Board of Commissioners and Outside Commissioners

Board of commissioners is the core of corporate governance

who has duty to ensure corporate strategy, management supervise,

and controlling accountability (Egon Zehnder International in FCGI

2006). It is the center of endurance and success of the corporation.

Other argument from Young (1998) argued, role of the board of

commissioners is matter in improving company performance by

pressing the manipulation of earnings and provide assurance on the

proper information about the company's operations. GCG should be

supported from the higher level that is the board of commissioners

to increase the effectivity hence will increase firm value.

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 Besides, outside commissioners has function to solve agency

conflict inside corporation. They could communicate the purpose of

every shareholders to the management team. Dechow et al. (1996)

stated, the independency of corporate board will reduce the

fraudulent activities in the financial report. The existence of outside

commissioners is expected to increase the effectivity og supervising

and the quality of financial report. Better the quality of financial

report increase investor trust and let them invest more to the

corporation. More shares are invested will increase share price and

thus increase firm value.

2.4.3. Audit Committee

As written in Crisan et al. (2014) study, a group of researchers

suggests that the audit committee play a large role in consolidation

of financial control within a company (Collier, 1993; Vinten & Lee,

1993). A number of studies have found that inside of companies with

an audit committee, particularly when the committee is active and

independent, there is less chance for the occurrence of fraud

(Beasley et al., 2000; Abbott et al., 2000, McMullen, 1996) and other

irregularities reporting (McMullen, 1996). The audit committee has

responsibilities, monitoring the financial reporting process,

monitoring the effectiveness of internal control or internal audit, as

appropriate, and risk management of the company, monitoring the

statutory audit of annual financial statements and the consolidated

annual financial statements, and monitoring the independence of the

18
 statutory auditor of the company. The existence of audit committee

plays the key element in supporting the embodiment of GCG.

Naturally, it could lower down the possibility of the errors in

financial reporting, the earnings management methods to smooth

income, the compliance with GAAP, the reliability of the accounting

numbers, and the confidence of the balances. Hence, it is all for the

harmony between the interest of management, shareholders,

investors, regulator, and public.

2.4.4. Disclosure

Glosten and Milgrom (1985) in Sugito (2012) stated, disclosure

used to reduce the information assymetry which then could decrease

the possibility of earnings management in the corporation. Investors

could value a corporation by the items that the corporate disclose.

More disclosure will increase their trust to invest more to the

corporation. Through information disclosure, corporate could lower

down the uncertainty of the corporate future prospect. This activity

will increase trading volume and increase share price in the market

which reflect firm value.

2.6. Firm Market Value

Brealey et. al (2007:46) defines firm value as investors’ collective

assessment of how well a corporate condition today and in the future.

Husnan (2000:7) suggests, firm value is the price that buyer is willing to pay

if the corporation is sold. It could be interpreted through its share prices,

19
 higher the share price so do the firm value and the reverse. Firm value also

defines as market value because firm value provide shareholders prosperous

if share price is increasing. Every policy adopted by the management to

improve firm value by maximizing shareholder value reflected from the

share prices (Bringham and Houston, 2006 : 19). Ultimate purpose of the

corporation is maximizing firm value. Because it will increase prosperity of

the corporate owner (Husnan, 2000 : 7). Firm market value describes how

well management controls their assets, which could be observed by their

financial performance. Samuel in Johan (2010:24) stated, firm value is the

important concept for the investors because it is the indicator to value the

corporate as a whole.

According to definitions of firm value above, it concludes that firm

value is the core value which could be identified by the share prices in the

market. Therefore, high share price indicates high value of corporation.

2.6.1. Measurement of Firm Market Value

Firm value is measured by the assessment ratio or market ratio.

Assessment ratio is the overall financial performance measurement.

Some indicators to measure firm value :

1. Price to Earning Ratio (P/E Ratio)

P/E ratio indicates the dollar amount an investor can expect to

invest in a company in order to receive one dollar of that

company’s earnings. P/E is sometimes referred as the price

multiple because it shows how much investors are willing to pay

per dollar of earnings. Higher P/E ratio, higher firm possibility to

grow and increase its value.

20
 P/E ratio can be calculated by the formula :

𝐒𝐡𝐚𝐫𝐞 𝐩𝐫𝐢𝐜𝐞
P/E Ratio =
𝐄𝐚𝐫𝐧𝐢𝐧𝐠 𝐏𝐞𝐫 𝐒𝐡𝐚𝐫𝐞

P/E Ratio is imporant because :

1. P/E Ratio could help investor in comparing two firms

directly and accurately.

2. Investors can compare firms in one industry and the average

of firms in the market as a whole, hence could wider investors

insight of undervalued or overvalued shares.

But, P/E ratio also has some weaknesses :

1. Manipulation of earnings. Most of firms often use

techiques to manipulate net income that will make

inaccurate result.

2. Different industries will make comparation of P/E ratio

become harder. Because different industries will have

different growth level, risk level, etc.

3. P/E ratio only includes two component in the

measurement which ignore other important component

such as future growth and prospect.

2. Price to Book Value (PBV)

Second measurement of firm value is Price to Book Value

(PBV). Ang (1997) stated, PBV is a market ratio to measure share

price over its book value. PBV shows how corporation creates

21
 corporate value in terms of price over the existing capital. Higher

PBV means corporate success providing satisfaction and

prosperity of shareholders. Where Suad (2001) stated, higher

PBV higher corporate valuation by the shareholders compared to

the fund invested in the corporation. Commonly, PBV result more

than 1 means corporate market price higher than its book value.

This result will thus rise investors trust to the corporate prospect

in the future.

Ang and Robert (1997) formulate PBV ratio :

𝐌𝐚𝐫𝐤𝐞𝐭 𝐏𝐫𝐢𝐜𝐞 𝐩𝐞𝐫 𝐬𝐡𝐚𝐫𝐞

𝐏𝐁𝐕 =
𝐁𝐨𝐨𝐤 𝐕𝐚𝐥𝐮𝐞 𝐩𝐞𝐫 𝐬𝐡𝐚𝐫𝐞

Some advantages in using PBV to measure firm value are :

1. Investors find the PBV ratio useful because the book value of

equity provides a relatively stable that can be easily compared

to the market price.

2. PBV ratio can be used for firms with positive book values and

negative earnings since negative earnings render price-to-

earnings ratios useless, and there are fewer companies with

negative book values than companies with negative earnings.

However, PBV ratio provide disadvantages below :

1. PBV ratio may not be comparable, especially for companies

from different countries.

22
 2. PBV ratio can be less useful for services and information

technology companies with little tangible assets on

their balance sheets.

Finally, the book value can become negative as a result of a long

series of negative earnings, making the PBV ratio useless for

relative valuation purposes.

3. Tobin’s Q

Tobin’s Q Ratio is introduced by James Tobin from Yale

University who hold the Nobel Economics. His hypothesis stated,

the combination of firm value of stock exchanges is equal to their

replacement costs. Research from Sudiyanto and Puspitasari

(2010) stated Tobin’s Q is the ratio of market value measured by

dividing total shares outstanding and liability with asset

replacement cost. It is used to value market price because it is well-

known in considerating the potential of share price growth,

management capability in managing firm assets, and considerating

investment growth. Tobin’s Q could detect growth prospect, bigger

the ratio means company have good prospect. And hence investors

willing to give more in purpose of having the company. Sekaredi

(2011) explained, company with high Tobin’s Q usually have a

strong brand image and lower Tobin’s Q is common for

competitive industries. (Brealey dan Myers, 2000).

Chung and Pruitt (1994) suggests the following Tobin’s Q

formula :

23
 𝐌𝐕𝐂𝐒+𝐏𝐒+𝐁𝐕𝐃
Tobins ‘ Q =
𝐓𝐨𝐭𝐚𝐥 𝐀𝐬𝐬𝐞𝐭𝐬

Where :

MVCS = Market Value of Common Stock (Price of firm’s

common stock at the publication date of financial

report x Number of common stock shares outstanding)

PS = Preferred Stock

BVD = Book Value of Debt

Brealey and Mayers (2007) stated, firm with high Tobin’s

Q usually have strong brand image, good growth prospect and

bigger intangible assets. This because if firm value of the assets

is high, investor is willing to sacrifice more to own the

corporation. Lower Tobin’s Q placed for the competitive and

weaker industries.

There are advantages of using Tobin’s Q :

1. Tobin’s Q provide wide information and explain more

phenomenon in the corporation such as the different cross-

sectional in investment decision (Claessens and Fan, 2003

in Sukamulja, 2004), and relationship between

management performance and benefit in acquisition

(Gompers, 2003 in Sukamulj, 2004).

2. Tobin’s Q considering share price growth, management

potential, and investment growth (Sudiyatno dan

Puspitasari, 2010).

24
 3. Tobin’s Q includes all aspect of debt and capital. Not only

common stock and equity but also total assets.

4. Not only focus on fundamental aspect, but going wider in

valuing the firm such as firm assets, corporate prospect, and

intangible assets.

5. Tobin’s Q focus on firm valuation which very useful in

investor perpective.

Besides very useful for the investors financial analyst,

Tobin’s Q needs big amount of datas, extra time and extra

energy to process all the datas. Thus, this measurement is

not applicable for daily activities.

2.7. Factors Affecting Firm Market Value

2.7.1. Firm Size

Firm size is one of the important variable in determining firm

market value. It is a total reflection of firm assets. Bigger the firm

total assets bigger the firm size. Big number of total assets describe

higher capability to finance operational and future obligations. Big

firm usually obtained attentions more from the investors and wide

society. Riyanto (2011) explained, a big firm with widely distributed

shares will have more control in capital expansion and the reverse.

Therefore, big firm tends to be brave in issuing more shares which

will attract more investors and hence increasing firm value.

2.7.2. Firm Leverage

Leverage is a degree to which a company use its debt to covered

its assets. More debt used by the company will determine higher

25
 degree of financial leverage. A high degree of financial leverage

means high interest payments, and negatively affect the company’s

bottom-line earnings per share. Study from Ummi Isti’adah (2015)

stated, high degree of leverage shows higher investment risk and the

reverse. Therefore, higher leverage ratio could lower its market

value.

2.8. Previous Studies

Several empirical studies confirm a positive link between specific

corporate governance variables and firm performance. Many related studies

explored whether corporate governance in its entirety has any relationship

with firm performance or value.

Researcher studies and the results summarized below :

No Author Research

Research by using Standard & Poor’s

Transparency & Disclosure (T&D) index

and found that US companies can reduce

1 Patel and Dallas (2002)
their cost of equity capital by providing

higher transparency and disclosure to the

capital markets.

They analysed 2,327 US firms with 51

Brown and Caylor factors based on data sets of Institutional

2
(2006) Shareholder Services (ISS), and

concluded that better-governed firms are

26
 relatively more profitable and valuable,

and pay more cash to their shareholders.

He used a CGI and found that higher

quality corporate governance was

3 Gompers et al. (2003)
associated with improved future stock

performance.

They use a CGI, confirmed that

Klapper and Love corporate governance is an important

4 (2004) and Durnev and factor in explaining the performance and

Kim (2005) market value of public companies in

many emerging markets.

They use a CGI, found that corporate

governance is important in the case of

Korean public companies as well. This

Black et al. (2006a,
5 study also expect the positive
2009b)
relationship between corporate

governance standards and firm

performance.

He referred to the Asian financial crisis

of the late 1990s and found that

6 Johnson et al. (2000) corporate governance was extremely

relevant, and that there was a flight-to-

quality among firms during this period.

27
 Used firm-level data of 398 listed

companies from Indonesia, Korea,

Malaysia, Philippines and Thailand and

documented that the firm-level

7 Mitton (2002)
differences in the variables related to

corporate governance had a strong

impact on firm performance during the

Asian financial crisis.

Found that firms with better internal

Cornettetal (2009) and corporate governance tend to have higher

8
Vahamaa (2011) rates of return and are more profitable,

respectively.

Used 52 listed companies in Indonesia

Stock Exchanges and found no

9 Sukamulja (2004) significant effect of GCG to firm value in

the profitability, age and size of the

company.

Randy and Juniarti Found that GCG measured GCG score

10
(2013) has significant effect to the firm value.

2.9. Research Hypothesis

Stewardship theory had assumption that every man is essentially

trustworthy, able to act in good faith in the interest of others with integrity

and honesty (Donaldson and Davis 1988). But this view is distracted with the

28
emergence of agency theory which stated managers could not be trusted to do

their job which of course is to maximize shareholder value (Tricker).

Basically, the agent should follow the principal desires in operating the

company but in fact, many agents have their own goal which exactly includes

for their own benefit. This act trigger the agents to do the manipulation,

embezzlement and fraud which hence suffer the investors. The separation

power of the owner and the agent creates a problem named agency problem.

This problem occured because there is a dominant position of the agent who

operates and controls daily operation of the corporation. Sometimes they act

beyond the limits and forget the ultimate purpose of maximizing shareholders

value. This contradiction needs to be solved by the existence of GCG

practices.

According to Forum for Corporate Governance in Indonesia (FCGI),

corporate governance purposed to give value added for the stakeholders.

Hence, the advantage will be easier to get additional share capital, reducing

cost of capital, then improving business performance and firm market value.

Sylvia Veronica Siregar (2017) in the book of Corporate Governance in

Developing and Emerging Markets describes good corporate governance in

Indonesia. It includes the importance of shareholders rights, board

commissioners, auditors and internal audit quality, disclosures and

transparency in corporate governance procedure.

The concept of good corporate governance emphasizing the importance

of the right of shareholders to obtain information with true, accurate, and

timely. Providing their rights properly will increase their prosperities and

29
wealths. And it will increase their demand of buying shares which affect to

the rising share prices in the market. Efendi (2015) stated, share prices

showed firm value, if one increases, others will increase too. In other words,

share price increases caused by one of the factor of the shareholders

prosperity and it will be achieved by fulfilling their rights. Therefore,

fulfilled shareholder rights, higher their prosperity, will rise corporate share

prices and the firm value.

Egon Zehnder International (in FCGI 2006) stated, board

commissioners is the essence of the practice of Corporate Governance. They

tasked to guarantee the execution of corporate strategy, management

supervise, and controlling accountability. It is the center of endurance and

success of the corporation. Other argument from Young (1998) argued, role

of the board of commissioners is matter in improving company performance

by pressing the manipulation of earnings and provide assurance on the

proper information about the company's operations. GCG should be

supported from the higher level that is the board of commissioners to

increase the effectivity hence will increase firm value.

Other factor to increase the firm value is the quality of the auditors. A

corporate will have less chance for the occurrence of fraud with an active

and independent auditors both in audit committee and internal auditor

(Beasley et al., 2000; Abbott et al., 2000, McMullen, 1996). Audit

committee has the important role in accompanying commissioners in

controlling financial activity. Having an effective audit committee will put

forward financial disclosure and transparency which will improving firm

value.

30
 Hence, information disclosure and transparency may mitigate some of

the agency problems faced by the firms. Shareholders will be more informed

and information gap between the shareholders and the managers can be

reduced. Investors will perceive lower investment risk that would lead to a

higher firm value (Siagian, et. al., 2013).

Study of Klein (2002) and Chtourou et al. (2001) argued the

company which have proportion of independent board of commissioner will

impact the firm performance. Siallagan dan Machfoedz (2006) result a

positive impact between independent commissioners and firm value.

Sam’ani (2008) argued that audit committee has significant role in

increasing financial report credibility and therefore creating a proper

controlling system and the practice of good corporate governance.

A study from Klapper and Love (2002) find evidence that corporate

governance is positively related to operating performance and market value.

But oppositely, a research from Dwarachandra (2009) argued there is no

significant impact to the firm performance nor the firm value. Ramadhani

(2009) follows the disagreement that good corporate governance will be

beneficial in the long-term period.

Based on the framework above a hypothesis is constructed :

H : Good Corporate Governance has positive impact on the firm market

value

31