摘要：The two-tier board system practiced in Indonesia provides greater opportunity for the majority
shareholders to place representative on board which may expropriate interest of minority shareholders
and increase information asymmetry. This study looks at the influence of family ownership
on firm’s performance, by differentiating the influence of family ownership from family involvement
in companies listed on the Indonesia Stock Exchange. Family ownership is measured based
on family’s equity ownership in the firm and family’s involvement. This study explores family
involvement in threefold: involvement in the board of commissioners, involvement in the board of
directors and involvement in both boards. Firm performance is measured based on Value Added
Intellectual Coefficient (VAIC) which comprises of capital employed efficiency, human capital
efficiency, and structural capital efficiency. Data was collected for a period of three years from
2007 to 2009 on 155 firms which were identified as family firms. The findings show that family
ownership has a positive influence on firm performance. Family involvement, however, shows
mixed results. Family involvement in the board of commissioners has a positive but insignificant
influence on firm’s performance. Family involvement in the board of directors has a negative influence
on firm’s performance. Family involvement in both boards has a positive influence on firm
performance. The findings suggest that family involvement in both boards creates a balance between
the supervisory function and the management function, thus resulting in a more effective
monitoring of firm’s management.
关键词：Family ownership
Family involvement
Two;tier system
Value added intellectual coefficient
Firm performance
