Ownership Structures and Firm Performance: Analyzing Institutional, Managerial, and Foreign Ownership in Indonesia

The present study investigates the control of ownership structure on the performance of 72 manufacturing firms that were listed on the Indonesian Stock Exchange (IDX) from 2019 to 2023. Agency theory serves as the theoretical foundation for this investigation. The total number of observations is 320 units, determined using purposive sampling method. Return on Asset (ROA) is the measurement utilized to assess financial performance. Hypothesis testing is implemented through the utilization of multiple regression analysis. The results indicate that institutional ownership (INSTOWN) has a substantial positive impact on the performance of the firm. Managerial ownership (MOWN) is also found to have a statistically significant and positive impact on firm performance. Meanwhile, the performance of the firm is not significantly influenced by foreign ownership (FOWN). This research suggests that agency conflict can be mitigated through managerial and institutional ownership. INSTOWN and MOWN are in line with the interests of owners and managers, promoting more rigorous supervision of management. Conversely, FOWN does not significantly impact the company's financial performance, implying that while foreign ownership can bring expertise and best practices from abroad, its influence may be limited by factors such as differences in business culture, regulations, and operational influence.