Factors Affecting the Cost of Agency of Village Owned Enterprise (Bumdes) in Indonesia
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The purpose of this research is to know the agency cost structure in the management of Village Owned Enterprise (BUMDEs) ranging from institutional share ownership, share ownership owned by BUMDES management which actively in decision making and free cash flow is cash flow is really available to be distributed to all BUMDEs investors. This research was conducted by conducting surveys and field identification directly in 179 villages that have successfully run BUMDEs selected by purposive sampling in North Sumatera Province, Indonesia. Analyzes were performed with SPSS and Smart-PLS that form a structural equation. The variables used are agency cost, institutional share ownership, ownership of shares owned by the management and free cash flow (free cash flow). The results show that there is influence of institutional ownership, managerial ownership, and free cash flow to agency costs in the Village Owned Enterprise in North Sumatra. The free cash flow variables that partially affect the agency costs in the Village Owned Enterprise in North Sumatra.