Impact of Capital Structure and Governance on Financial Performance through Agency Costs in ASEAN-5
Larasati Sukma Perdana, Sudrajat, Ninuk Dewi Kesumaningrum
South Asian Journal of Social Studies and Economics · pp. 307–321 · Published 28 Oct 2025
10.9734/sajsse/2025/v22i101195Abstract
Aims: To examine how agency costs mediate the relationship between capital structure, corporate governance, and financial performance in the Top 50 publicly listed companies across five ASEAN countries. Methodology: Uses panel data analysis and the Sobel test to analyze mediation effects. Financial performance is measured by ROA, capital structure by DER, corporate governance by the proportion of independent board members, and agency costs by the operational expense ratio. Sampling: Covers the Top 50 listed firms from Indonesia, Malaysia, Singapore, Thailand, and the Philippines during 2018–2022. Results: Findings show that DER negatively affects financial performance but positively affects agency costs. Corporate governance reduces agency costs but does not directly influence financial performance. Agency costs significantly harm performance and mediate both the capital structure–performance and governance–performance relationships.
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