THE INFLUENCE OF GOOD COORPERATE GOVERNANCE AND FINANCIAL PERFORMANCE ON THE INVESTOR REACTION

Abstract

Having setting targets to meet the stake holder needs, a company will apply a good corporate governance to attract the inverstors, since the investor will be really careful on deciding their investment. A company’s financial report often becomes the indicator for the investor to decide their investment action. Therfore, the better a company’s financial performance is the more investor will trust to put their investment on that company.The study aims to determine the effect of good corporate governance as well as the financial performance on the investor reaction, as well as the implementation of good corporate governance and financial performance to investors. The study uses a quantitative methodby applying a descriptive approach and conducting the documentation of data collection technique. The data is analysed by using the multiple linear regression with SPSS (Statistical Product and service Solution). The result shows that the application of good corporate governance affect the reaction of investors. However, the company financial performance does not significantly influence investor’s reaction. Finally, both good corporate governance and financial performance give a significant effect on the investor reaction to a pharmaceutical manufacturing company.