The Impact of Corporate Governance on Firm Performance: A Review

Abstract

Aims: The purpose of this paper is to analyze the results of recent empirical research on the impact of corporate governance on firm performance and reflect on potential research design issues that lead to inconsistent results. Study design: Literature Review. Place and Duration of Study: Archival Literature from Emerald Journal’s Data. Methodology: This study aims to explore the impact of financing decisions on firm value in Indonesia, focusing on the implementation of Good Corporate Governance (GCG). This study synthesizes existing studies by collecting data from scientific literature sourced from online databases such as Google Scholar, Mendeley, and others. The literature review includes articles published in the last decade (2020-2024). Results: Empirical evidence shows that financing decisions positively and significantly affect firm value. Optimal financing choices can increase firm value sustainably. In addition, the implementation of GCG principles is essential in overseeing management practices, ensuring transparent, responsible, and shareholder-friendly financing decisions. Conclusion: This study provides in-depth insights into the relationship between financing decisions, firm value, and the importance of GCG practices in the Indonesian business environment.