ROA ROE
CHAPTER 4: DATA ANALYSIS
4.3 Inferential Analyses
4.3.2 Hypothesis Testing for Each of the Parameter (T-Test)
In this section, the researcher will carry out a t-test for each of the variable to test which of the parameter is significant for the model.
4.3.2.1 Managerial Ownership Model
4.3.2.1.1 T-test 𝛽2 (Firm Age)
To test the significant relationship between managerial ownership and firm age, the researcher had carry out a hypothesis testing at α = 0.05.
H0: 𝛽2= 0 H1: 𝛽2≠ 0
Decision Rule: Reject H0 if p-value is smaller than α=0.05. Otherwise, do not reject H0.
P-Value: 0.8413
Decision Making: Do not reject H0 since p-value = 0.8413 is larger than α=0.05.
Conclusion: This research have insufficient evidence to conclude that the firm age is significant at 5% significant level.
In this t-test, the null hypothesis is the firm age is significant in the model. Decision rule will be reject the null hypothesis if p-value is smaller than 5% significance level. Otherwise, do not reject the null hypothesis. This means that when the researcher reject the null hypothesis, it can conclude that have insufficient evidence to prove the independent variable is significant in the model. After carry out t-test, the p-value of the firm age is 0.8413, which is larger than 5% significance level;
hence, the research stated insufficient evidence to conclude the firm age is
4.3.2.1.2 T-test 𝛽3(Firm Size)
To test the significant relationship between managerial ownership and firm size, the researcher had carry out a hypothesis testing at α = 0.05.
H0: 𝛽3= 0 H1: 𝛽3≠ 0
Decision Rule: Reject H0 if p-value is smaller than α=0.05. Otherwise, do not reject H0.
P-Value: 0.0145
Decision Making: Reject H0 since p-value = 0.0145 is smaller than α = 0.05.
Conclusion: This research have sufficient evidence to conclude that the firm size is significant at 5% significant level.
In this t-test, the null hypothesis is the firm size is significant in the model. Decision rule will be reject the null hypothesis if p-value is smaller than 5% significance level. Otherwise, do not reject the null hypothesis. This means that when reject the null hypothesis, it can conclude that have insufficient evidence to prove the independent variable is significant in the model. After carry out t-test, the p-value of the firm size is 0.0145, which is smaller than 5% significance level; hence, the researcher make a conclusion stated sufficient evidence to conclude the firm size is significant at 5% significance level.
4.3.2.1.3 T-test 𝛽4(Leverage)
To test the significant relationship between managerial ownership and leverage, the researcher had carry out a hypothesis testing at α = 0.05.
H0: 𝛽4= 0 H1: 𝛽4≠ 0
Decision Rule: Reject H0 if p-value is smaller than α = 0.05. Otherwise, do not reject H0.
P-Value: 0.0131
Decision Making: Reject H0 since p-value = 0.0131 is smaller than α = 0.05.
Conclusion: This research have sufficient evidence to conclude that leverage is significant at 5% significant level.
In this t-test, the null hypothesis is the leverage is significant in the model. Decision rule will be reject the null hypothesis if p-value is smaller than 5% significance level. Otherwise, do not reject the null hypothesis. This means that when reject the null hypothesis, it can conclude that have insufficient evidence to prove the independent variable is significant in the model. After carry out t-test, the p-value of the leverage is 0.0131, which is smaller than 5% significance level; hence, the researcher make a conclusion stated sufficient evidence to conclude the leverage is significant at 5% significance level.
4.3.2.1.4 T-test 𝛽5(ROA)
To test the significant relationship between managerial ownership and return on asset, the researcher had carry out a hypothesis testing at α = 0.05.
H0: 𝛽5= 0 H1: 𝛽5≠ 0
Decision Rule: Reject H0 if p-value is smaller than α = 0.05. Otherwise, do not reject H0.
P-Value: 0.5065
Decision Making: Do not reject H0 since p-value = 0.5065 is larger than α = 0.05.
Conclusion: This research have insufficient evidence to conclude that return on asset is significant at 5% significant level.
In this t-test, the null hypothesis is the return on asset is significant in the model.
Decision rule will be reject the null hypothesis if p-value is smaller than 5%
significance level. Otherwise, do not reject the null hypothesis. This means that when reject the null hypothesis, it can conclude that have insufficient evidence to prove the independent variable is significant in the model. After carry out t-test, the p-value of the return on asset is 0.5065, which is larger than 5% significance level;
hence, the researcher make a conclusion stated insufficient evidence to conclude the return on asset variable is significant at 5% significance level.
4.3.2.1.5 T-test 𝛽6 (ROE)
To test the significant relationship between managerial ownership and return on equity, the researcher had carry out a hypothesis testing at α= 0.05.
H0: 𝛽6= 0 H1: 𝛽6≠ 0
Decision Rule: Reject H0 if p-value is smaller than α = 0.05. Otherwise, do not reject H0.
P-Value: 0.2950
Decision Making: Do not reject H0since p-value = 0.2950 is larger than α = 0.05.
Conclusion: This research have insufficient evidence to conclude that return on equity is significant at 5% significant level.
In this t-test, the null hypothesis is the return on equity is significant in the model.
Decision rule will be reject the null hypothesis if p-value is smaller than 5%
significance level. Otherwise, do not reject the null hypothesis. This means that when reject the null hypothesis, it can conclude that have insufficient evidence to prove the independent variable is significant in the model. After carry out t-test, the p-value of the return on equity is 0.2950, which is larger than 5% significance level;
hence, the researcher make a conclusion stated insufficient evidence to conclude the return on equity is significant at 5% significance level.
4.3.2.1.6 T-test 𝛽7(Tobin’s Q)
To test the significant relationship between managerial ownership and Tobin’s Q, the researcher had carry out a hypothesis testing at α = 0.05.
H0: 𝛽7= 0 H1: 𝛽7≠ 0
Decision Rule: Reject H0 if p-value is smaller than α = 0.05. Otherwise, do not reject H0.
P-Value: 0.0852
Decision Making: Do not reject H0 since p-value = 0.0852 is larger than α = 0.05.
Conclusion: This research have insufficient evidence to conclude that tobin q is significant at 5% significant level.
In this t-test, the null hypothesis is the Tobin’s q is significant in the model. Decision rule will be reject the null hypothesis if p-value is smaller than 5% significance level. Otherwise, do not reject the null hypothesis. This means that when reject the null hypothesis, it can conclude that have insufficient evidence to prove the independent variable is significant in the model. After carry out t-test, the p-value of the Tobin’s q is 0.0852, which is larger than 5% significance level; hence, the researcher make a conclusion stated insufficient evidence to conclude the firm age is significant at 5% significance level. However, if the significance level is set at 10%, the independent variable with p-value of 0.0852, which is smaller than 10%, will be significant at 10% significance level.
4.3.2.2 Non-managerial ownership model
4.3.2.2.1 T-test 𝛽2 (Firm Age)
To test the significant relationship between non-managerial ownership and firm age, the researcher had carry out a hypothesis testing at α = 0.05.
H0: 𝛽2= 0 H1: 𝛽2≠ 0
Decision Rule: Reject H0 if p-value is smaller than α=0.05. Otherwise, do not reject H0.
P-Value: 0.8413
Decision Making: Do not reject H0 since p-value = 0.8413 is larger than α=0.05.
Conclusion: This research have insufficient evidence to conclude that the firm age is significant at 5% significant level.
In this t-test, the null hypothesis is the firm age is significant in the model. Decision rule will be reject the null hypothesis if p-value is smaller than 5% significance level. Otherwise, do not reject the null hypothesis. This means that when reject the null hypothesis, it can conclude that have insufficient evidence to prove the independent variable is significant in the model. After carry out t-test, the p-value of the firm age is 0.8413, which is larger than 5% significance level. Hence, the researcher make a conclusion stated insufficient evidence to conclude the firm age is significant at 5% significance level.
4.3.2.2.2 T-test 𝛽3(Firm Size)
To test the significant relationship between non-managerial ownership and firm size, the researcher had carry out a hypothesis testing at α = 0.05.
H0:𝛽3= 0 H1: 𝛽3≠ 0
Decision Rule: Reject H0 if p-value is smaller than α=0.05. Otherwise, do not reject H0.
P-Value: 0.0145
Decision Making: Reject H0 since p-value = 0.0145 is smaller than α = 0.05.
Conclusion: This research have sufficient evidence to conclude that the firm size is significant at 5% significant level.
In this t-test, the null hypothesis is the firm size is significant in the model. Decision rule will be reject the null hypothesis if p-value is smaller than 5% significance level. Otherwise, do not reject the null hypothesis. This means that when reject the null hypothesis, it can conclude that have insufficient evidence to prove the independent variable is significant in the model. After carry out t-test, the p-value of the firm size is 0.0145, which is smaller than 5% significance level; hence, the researcher make a conclusion stated sufficient evidence to conclude the firm size is significant at 5% significance level.
4.3.2.2.3 T-test 𝛽4(Leverage)
To test the significant relationship between non-managerial ownership and leverage, the researcher had carry out a hypothesis testing at α = 0.05.
H0: 𝛽4= 0 H1: 𝛽4≠ 0
Decision Rule: Reject H0 if p-value is smaller than α = 0.05. Otherwise, do not reject H0.
P-Value: 0.0131
Decision Making: Reject H0 since p-value = 0.0131 is smaller than α = 0.05.
Conclusion: This research have sufficient evidence to conclude that leverage is significant at 5% significant level.
In this t-test, the null hypothesis is the leverage is significant in the model. Decision rule will be reject the null hypothesis if p-value is smaller than 5% significance level. Otherwise, do not reject the null hypothesis. This means that when reject the null hypothesis, it can conclude that have insufficient evidence to prove the independent variable is significant in the model. After carry out t-test, the p-value of the leverage is 0.0131, which is smaller than 5% significance level; hence, the researcher make a conclusion stated sufficient evidence to conclude the leverage is significant at 5% significance level.
4.3.2.2.4 T-test 𝛽5(ROA)
To test the significant relationship between non-managerial ownership and return on asset, the researcher had carry out a hypothesis testing at α = 0.05.
H0: 𝛽5= 0 H1: 𝛽5≠ 0
Decision Rule: Reject H0 if p-value is smaller than α = 0.05. Otherwise, do not reject H0.
P-Value: 0.5065
Decision Making: Do not reject H0 since p-value = 0.5065 is larger than α = 0.05.
Conclusion: This research have insufficient evidence to conclude that return on asset is significant at 5% significant level.
In this t-test, the null hypothesis is the return on asset is significant in the model.
Decision rule will be reject the null hypothesis if p-value is smaller than 5%
significance level. Otherwise, do not reject the null hypothesis. This means that when reject the null hypothesis, it can conclude that have insufficient evidence to prove the independent variable is significant in the model. After carry out t-test, the p-value of the return on asset is 0.5065, which is larger than 5% significance level;
hence, the researcher make a conclusion stated insufficient evidence to conclude the return on asset variable is significant at 5% significance level.
4.3.2.2.5 T-test 𝛽6 (ROE)
To test the significant relationship between non-managerial ownership and return on equity, the researcher had carry out a hypothesis testing at α= 0.05.
H0: 𝛽6= 0 H1: 𝛽6≠ 0
Decision Rule: Reject H0 if p-value is smaller than α = 0.05. Otherwise, do not reject H0.
P-Value: 0.2950
Decision Making: Do not reject H0 since p-value = 0.2950 is larger than α = 0.05.
Conclusion: This research have insufficient evidence to conclude that return on equity is significant at 5% significant level.
In this t-test, the null hypothesis is the return on equity is significant in the model.
Decision rule will be reject the null hypothesis if p-value is smaller than 5%
significance level. Otherwise, do not reject the null hypothesis. This means that when reject the null hypothesis, it can conclude that have insufficient evidence to prove the independent variable is significant in the model. After carry out t-test, the p-value of the return on equity is 0.2950, which is larger than 5% significance level.
Hence, the researcher make a conclusion stated insufficient evidence to conclude the return on equity is significant at 5% significance level.
4.3.2.2.6 T-test 𝛽7(Tobin’s Q)
To test the significant relationship between non-managerial ownership and Tobin’s Q, the researcher had carry out a hypothesis testing at α = 0.05.
H0: 𝛽7= 0 H1: 𝛽7≠ 0
Decision Rule: Reject H0 if p-value is smaller than α = 0.05. Otherwise, do not reject H0.
P-Value: 0.0852
Decision Making: Do not reject H0since p-value = 0.0852 is larger than α = 0.05.
Conclusion: This research have insufficient evidence to conclude that tobin q is significant at 5% significant level.
In this t-test, the null hypothesis is the Tobin’s q is significant in the model. Decision rule will be reject the null hypothesis if p-value is smaller than 5% significance level. Otherwise, do not reject the null hypothesis. This means that when reject the null hypothesis, it can conclude that have insufficient evidence to prove the independent variable is significant in the model. After carry out t-test, the p-value of the Tobin’s q is 0.0852, which is larger than 5% significance level; hence, the researcher make a conclusion stated insufficient evidence to conclude the firm age is significant at 5% significance level. However, if the significance level is 10%, the p-value (0.0852) is smaller than 10%, so the researcher have sufficient evidence to conclude that Tobin’s q is significant at 10% significant level.