The Effect of Corporate Risk-taking on Company Performance in View of the Firm Life Cycle
Keywords:
Return on Asset, Corporate Risk-taking, Firm Life Cycle
Abstract
Examining the impact of Corporate Risk-Taking (CRT) on business performance over the firm life cycle is the primary objective of this research. Participating manufacturing enterprises from the 2020–2022 timeframe on the Indonesia Stock Exchange made up the study's population. Similarly, the research sample was selected by a purposive sampling procedure. We used 356 pieces of observational data from 137 different firms in our sample. The multiple linear approach, implemented in SPSS Statistics 24, was used for the study. First, CRT as measured by the standard deviation of ROA has a positive impact on performance. Second, CRT as measured by the standard deviation of stock returns has no effect on performance. Third, CRT as measured by the standard deviation of ROA has a negative impact on performance during the introduction stage but a positive impact during the maturity stage. Fourth, CRT as measured by the standard deviation of stock returns has no effect on performance throughout all lifetime stages of a company
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References
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Dickinson, V. (2011). Cash flow patterns as a proxy for firm life cycle. Accounting Review, 86(6), 1969–1994. https://doi.org/10.2308/accr-10130
Febrina, F., Tamara, D. A. D., & Syarief, M. E. (2021). Kinerja Keuangan dengan pendekatan Economic Value Added (EVA) pada PT. Mayora Indah, Tbk. Indonesian Journal of Economics and Management, 1(3), 584–596. https://doi.org/10.35313/ijem.v1i3.3029
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Ghozali, I. (2016). Aplikasi Analisis Multivariate Dengan Program IBM SPSS 23 (8th ed.). Univ. Diponegoro Press.
Habib, A., & Hasan, M. M. (2015). Firm life cycle, corporate risk-taking and investor sentiment. Accounting and Finance, 57(2), 465–497. https://doi.org/10.1111/acfi.12141
Hadinata, S. (2018). Tingkat Pengembalian (Return), Risiko, dan Koefisien Variasi pada Saham Syariah dan Saham Nonsyariah. AKTSAR: Jurnal Akuntansi Syariah, 1(2), 171. https://doi.org/10.21043/aktsar.v1i2.5089
Hutabarat, F. (2021). Analisis Kinerja Keuangan Perusahaan. Desanta Publisher.
Itan, I., & Devina. (2021). Pengaruh Struktur Kepemilikan Dan Tata Kelola Perusahaan Terhadap Perilaku Pengambilan Risiko. ULTIMA Accounting, 13(2), 294–309.
John, K., Litov, L., & Yeung, B. (2008). Corporate Governance and Risk-Taking. In THE JOURNAL OF FINANCE •: Vol. LXIII (Issue 4).
Kesuma, N., Gozali, E., & Syathiri, A. (2018). Pengaruh Corporate Governance Index Terhadap Risk-Taking dan Dinamika Bisnis Perbankan di Indonesia. JURNAL MANAJEMEN DAN BISNIS SRIWIJAYA, 15(2), 106–118. https://doi.org/10.29259/jmbs.v15i2.5698
Khrawish, H. A. (2011). Determinants of commercial banks performance: evidence from Jordan. International Research Journal of Finance and Economics, 5(5), 19–45.
Kriswidiyanti, P. I. D., Kristanto, A. B., & Rita, M. R. (2021). Relevansi Nilai Ukuran Kinerja Dan Risiko: Tinjauan Berdasarkan Siklus Hidup Usaha. Jurnal Akuntansi Aktual, 8(1), 13–24. https://doi.org/http://dx.doi.org/10.17977/um004v8i12021p13
Li, J. (2016). Board Advising, Risk-Taking, and Firm Performance. Journal of Financial Risk Management, 05(03), 149–160. https://doi.org/10.4236/jfrm.2016.53015
Mulyawan, S. (2015). Manajemen Resiko. CV Pustaka Setia.
Murnawati, Erti, L., & Tasril. (2023). Analisis Pengukuran Kinerja Keuangan Berdasarkan Rasio Profitabilitas. Jurnal Daya Saing, 9, 488–492.
Ngo, N.-Q.-N., Nguyen, C.-N., Ngo, N.-N.-N., & Nguyen, T.-K. (2023). The Influence of Firm Life Cycle On Firm Risk-taking Evidence of Vietnam. Research Square, 1–44. https://doi.org/10.21203/rs.3.rs-3576601/v1
Nugrahayu, E. R., & Retnani, E. D. (2015). Penerapan Metode Balanced Scorecard Sebagai Tolok Ukur Pengukuran Kinerja Perusahaan. Jurnal Ilmu & Riset Akuntansi, 4(10), 1–16.
Oktaviani, C. (2021). Siklus hidup perusahaan, pengambilan risiko, dan kinerja perusahaan indonesia. Universitas Pelita Harapan.
Olaniran, M. O., Namusonge, G. S., & Muturi, W. (2016). The Role of Risk-taking on Performance of Firms on Nigerian Stock Exchange. International Journal of Research in Business Studies and Management, 3(3), 36–44. www.ijbsnet.com http://hdl.handle.net/123456789/2748
Panda, B., & Leepsa, N. M. (2017). Agency theory: Review of theory and evidence on problems and perspectives. Indian Journal of Corporate Governance, 10(1), 74–95. https://doi.org/10.1177/0974686217701467
Pradipta, L. N., Sitinjak, E. L. M., & Sasmito, Y. W. D. (2020). Pengaruh Kinerja Keuangan Perusahaan Terhadap Pengambilan Keputusan Investor Dalam Siklus Hidup Perusahaan yang Berbeda. JOURNAL OF APPLIED BUSINESS ADMINISTRATION, 4(1), 31–37. https://doi.org/10.30871/jaba.v4i1.1957
Pratono, A. H. (2018). Does firm performance increase with risk-taking behavior under information technological turbulence?: Empirical evidence from Indonesian SMEs. Journal of Risk Finance, 19(4), 361–378. https://doi.org/10.1108/JRF-10-2017-0170
Sanders, WM. G., & Hambrick, D. C. (2007). Swinging for the Fences: The Effects of Ceo Stock Options on Company Risk Taking and Performance. Academy of Management Journal, 50(5), 1055–1078. https://doi.org/10.5465/amj.2007.27156438
Setiarini, A., Gani, L., Diyanty, V., & Adhariani, D. (2023). Strategic orientation, risk-taking, corporate life cycle and environmental, social and governance (ESG) practices: Evidence from ASEAN countries. Business Strategy and Development, 6(3), 491–502. https://doi.org/10.1002/bsd2.257
Severesia, C., & Juliana, R. (2022). Pengaruh Ketidakpastian Kebijakan Ekonomi Terhadap Pengambilan Risiko Perusahaan di Indonesia. Jurnal Riset Akuntansi Dan Keuangan, 10(3), 491–502. https://doi.org/10.17509/jrak.v10i3.43857
Shahzad, F., Lu, J., & Fareed, Z. (2019). Does firm life cycle impact corporate risk taking and performance? Journal of Multinational Financial Management, 51, 23–44. https://doi.org/10.1016/j.mulfin.2019.05.001
Simamora, A. J. (2023). Firms performance, risk taking and managerial ability. International Journal of Productivity and Performance Management, 72(3), 789–808. https://doi.org/10.1108/IJPPM-03-2021-0172
Younas, Z. I., & Zafar, A. (2019). Corporate risk taking and sustainability: a case of listed firms from USA and Germany. Journal of Global Responsibility, 10(1), 2–15. https://doi.org/10.1108/JGR-07-2018-0027
Yuliansyah, Y. (2020). Analysis of Factors Affecting Company Performance. Jurnal Riset Akuntansi Dan Auditing, 7(3), 26–41.
Zain, I. Y. (2022). Effect of Corporate Social Responsibility and Firm Life Cycle on Banking Performace in Indonesia. Financial Management Studies, 2(3).
Zeng, J. hong, Tan, L. ping, & Chen, X. hong. (2014). Managerial equity incentive, corporate risk-taking, and corporate performance. International Journal of Simulation and Process Modelling, 9(4), 246–254. https://doi.org/10.1504/IJSPM.2014.066370
