Controlling Ownership and Long-term Post-IPO Performance: The Moderating Role of Firm Size in Indonesia (2021-2024)

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Ramadhan, Alvaro Putra (2026) Controlling Ownership and Long-term Post-IPO Performance: The Moderating Role of Firm Size in Indonesia (2021-2024). Diploma thesis, IPMI Institute.

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Abstract

This study examines the effect of controlling ownership on one-year post-IPO returns and the moderating role of firm size of 206 firms listed on the Indonesia Stock Exchange during 2021–2024. During said period, the Indonesian IPO market is characterized by a rapid expansion of retail investor participation and an average one-year IPO return of 49.22 percent substantially exceeding the IHSG benchmark of 5.14 percent, yet the governance determinants of post-listing performance remain underexplored. The study employs a cross-sectional OLS moderated regression framework with HC1 robust standard errors as a robustness check. The results support both research hypotheses. Controlling ownership has a significant negative effect on one-year returns (β = −10.461, p = 0.018), consistent with the entrenchment hypothesis under agency theory. The interaction between controlling ownership and firm size is positive and significant (β = 0.875, p = 0.017), indicating that the entrenchment effect weakens as firm size increases due to stronger external monitoring in larger firms, though it does not fully disappear even at the largest firm sizes. Initial return is also a significant predictor across all specifications (β = 1.347, p = 0.003), reflecting the sustained momentum of IPO under-pricing in Indonesia's retail-driven market. The findings demonstrate that the governance effect of controlling ownership is conditional on firm size rather than uniform, with entrenchment most pronounced in smaller firms and partially constrained in larger ones. These results contribute to the emerging market IPO literature and carry practical implications for retail investors, OJK, and future research on IPO governance in East Asian markets.

Keywords: controlling ownership, post-IPO performance, firm size, moderation, agency theory, Indonesia Stock Exchange, IPO under-pricing, initial return

Item Type: Thesis (Diploma)
Subjects: H Social Sciences > H Social Sciences (General)
Divisions: Thesis > Bachelor of Business Administration
Depositing User: sandra margaretha
Date Deposited: 29 Sep 2026 02:27
Last Modified: 29 Sep 2026 02:27
URI: http://repository.ipmi.ac.id/id/eprint/3049

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