The Effect of Real Earnings Management, Institutional Ownership, and Other Factors on Firm Value in Indonesia

Sherly Anggraini; Ita Trisnawati

doi:10.59890/ijbmp.v4i3.254

Authors

Sherly Anggraini Trisakti School of Management, Jl. Kyai Tapa No. 20 Jakarta 11440, Indonesia
Ita Trisnawati Trisakti School of Management, Jl. Kyai Tapa No. 20 Jakarta 11440, Indonesia

DOI:

https://doi.org/10.59890/ijbmp.v4i3.254

Keywords:

Firm Value, Institutional Ownership, Real Earnings Management, Tax Avoidance, Independent Board of Commissioners

Abstract

This study aims to obtain empirical evidence on the effect of institutional ownership, audit committee, real earnings management, profitability, liquidity, firm size, tax avoidance, and independent board of commissioners on firm value. The sample consists of 108 manufacturing companies listed on the Indonesia Stock Exchange (IDX) during 2022 to 2024, resulting in 324 observations. Using a quantitative approach with purposive sampling and multiple regression analysis, the results show that profitability and the independent board of commissioners have a positive effect on firm value, while real earnings management and liquidity have a negative effect. Meanwhile, institutional ownership, audit committee, firm size, and tax avoidance have no effect on firm value.

References

Adiputra, I. G., & Hermawan, A. (2020). The effect of corporate social responsibility, firm size, dividend policy and liquidity on firm value: Evidence from manufacturing companies in Indonesia. International Journal of Innovation, Creativity and Change, 11(6), 325–338.

Ahmad, H., Muslim, & Syahrah, N. (2022). Several factors affecting firm value manufacturing in Indonesia. Jurnal Akuntansi, 26(1), 127. https://doi.org/10.24912/ja.v26i1.821

Angeline, Y. R., & Tjahjoho, R. S. (2020). Tata kelola perusahaan dan rasio keuangan terhadap nilai perusahaan manufaktur [Corporate governance and financial ratios on the value of manufacturing companies]. Jurnal Bisnis dan Akuntansi, 22(2), 305–312. https://doi.org/10.34208/jba.v22i2.473

Ardillah, K., Breliastiti, R., Setiawan, T., & Machdar, N. M. (2022). The role of ownership structure in moderating the relationship between tax avoidance, corporate social responsibility disclosure, and firm value. Accounting Analysis Journal, 11(1), 21–30. https://doi.org/10.15294/aaj.v11i1.58613

Bon, S. F., & Hartoko, S. (2022). The effect of dividend policy, investment decision, leverage, profitability, and firm size on firm value. European Journal of Business and Management Research, 7(3), 7–13. https://doi.org/10.24018/ejbmr.2022.7.3.1405

Chakraborty, B., & Maruf, M. Y. H. (2023). Are liquidity, dividend policy, leverage, and profitability the determinants of firm value: Evidence from the listed firms? Copernican Journal of Finance and Accounting, 12(1), 47–63. https://doi.org/10.12775/cjfa.2023.003

Dirganpratiwi, P., & Yuniati, T. (2021). Pengaruh profitabilitas, leverage dan likuiditas terhadap nilai perusahaan pada perusahaan food dan beverages yang terdaftar di BEI [The effect of profitability, leverage, and liquidity on firm value in food and beverage companies listed on the IDX]. Jurnal Ilmu dan Riset Manajemen, 10, 1–17.

Faoziyanti, A., & Renny, R. (2024). The influence of good corporate governance and profitability on firm value of banking sub sector companies. Journal of Applied Business, Taxation and Economics Research, 3(6), 625–641. https://doi.org/10.54408/jabter.v3i6.295

Fauzia, E., & Djashan, I. A. (2020). Pengaruh good corporate governance dan karakteristik perusahaan terhadap nilai perusahaan non-keuangan yang terdaftar di Bursa Efek Indonesia [The effect of good corporate governance and company characteristics on the value of non-financial companies listed on the Indonesia Stock Exchange]. Jurnal Bisnis dan Akuntansi, 21(1), 109–120.

Febrianty, N. N. A., & Mertha, I. M. (2021). Effect of profitability, investment opportunity set and good corporate governance on company value. American Journal of Humanities and Social Sciences Research, (5), 238–246. https://www.ajhssr.com

Handayani, R. (2020). Effects of tax avoidance and financial performance on firm value. International Journal of Management Studies and Social Science Research, 321–341.

Hasanah, A. N., & Lekok, W. (2019). Faktor-faktor yang mempengaruhi nilai perusahaan: Kebijakan dividen sebagai pemediasi [Factors affecting firm value: Dividend policy as a mediating variable]. Jurnal Bisnis dan Akuntansi, 21(2), 165–178. https://doi.org/10.34208/jba.v21i2.617

Irwanto, Edward Y., & Teng, S. (2023). Factor affecting firm value with profitability as an intervening variable in food and beverage sub-sector companies listed on the Indonesia Stock Exchange. International Journal of Science Research, 6(2), 54–67.

Ispriyahadi, H., & Abdulah, B. (2021). Analysis of the effect of profitability, leverage and firm size on firm value. Jurnal Ilmu dan Riset Akuntansi, 3(2), 1–17. https://e-journal.stiekusumanegara.ac.id/index.php/jobma/article/view/290

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X

Jihadi, M., Vilantika, E., Hashemi, S. M., Arifin, Z., Bachtiar, Y., & Sholichah, F. (2021). The effect of liquidity, leverage, and profitability on firm value: Empirical evidence from Indonesia. Journal of Asian Finance, Economics and Business, 8(3), 423–431. https://doi.org/10.13106/jafeb.2021.vol8.no3.0423

Kharisma, S. K., & Sudarsi, S. (2024). Pengaruh likuiditas, profitabilitas, leverage dan aktivitas terhadap nilai perusahaan [The effect of liquidity, profitability, leverage, and activity on firm value]. Jurnal Ekonomi dan Ekonomi Syariah, 7(1), 146–158.

Leny, S., & Ramadhani, L. S. (2023). Firm value factors: The effect of intellectual capital, managerial ownership, and profitability. Jurnal Akuntansi, 27(3), 401–420. https://doi.org/10.24912/ja.v27i3.1487

Marc, T. F. W., Suciwati, & Karma, I. G. M. (2022). The effect of price earning ratio, firm size, and corporate social responsibility on firm value (Empirical study on pharmaceutical sub-sector companies listed on the Indonesia Stock Exchange 2016–2020 period). Journal of Applied Sciences in Accounting, Finance, and Tax, 5(1), 20–27. https://doi.org/10.31940/jasafint.v5i1.20-27

Nebie, M., & Cheng, M. C. (2023). Corporate tax avoidance and firm value: Evidence from Taiwan. Cogent Business & Management, 10(3), Article 2282218. https://doi.org/10.1080/23311975.2023.2282218

Nurhaiyani. (2018). Pengaruh corporate governance, leverage dan faktor lainnya terhadap nilai perusahaan non-keuangan [The effect of corporate governance, leverage, and other factors on the value of non-financial companies]. Jurnal Bisnis dan Akuntansi, 20(2), 107–116. https://doi.org/10.34208/jba.v20i2.415

Nurjanah, S., Umiyati, I., & Icih. (2020). The effect of tax avoidance, intellectual capital, and real earnings management on firm value. Cuadernos de Economía, 43(123), 410–418. https://doi.org/10.32826/cude.v4i123.403

Nurseto, I., & Bandiyono, A. (2021). The effect of tax avoidance on firm value with tax expert as moderating variables. Jurnal Keuangan dan Perbankan, 25(4), 804–820. https://doi.org/10.26905/jkdp.v25i4.5563

Nursetya, R. P., & Hidayati, L. N. (2021). How does firm size and capital structure affect firm value? Journal of Management and Entrepreneurship Research, 1(2), 67–76. https://journal.unisnu.ac.id/jmer/article/download/2021.12.02.2-19/127

Oldana, D., & Marietza, F. (2024). The effect of tax avoidance on firm value with earnings management as a mediation variable. EKOMBIS REVIEW: Jurnal Ilmiah Ekonomi dan Bisnis, 12(1), 1037–1050. https://doi.org/10.37676/ekombis.v12i1.5274

Özcan, A. (2021). Audit committee and firm value: An empirical investigation. Muhasebe Bilim Dünyası Dergisi, 23(2), 204–221. https://doi.org/10.31460/mbdd.756299

Prieto, Tulcanaza A. B., & Lee, Y. H. (2022). Real earnings management and firm value using quarterly financial data: Evidence from Korea. Global Business and Finance Review, 10(1), 50–64. https://hdl.handle.net/10419/305836

Raharjo, A. A., & Muhyarsyah. (2021). The impacts of institutional ownership, leverage and firm size to firm value with profitability as a moderation variable. International Journal of Business, Economics and Law, 24(5), 184–194.

Ramadhan, J. A., & Rahayuningsih, D. A. (2020). Faktor-faktor yang mempengaruhi nilai perusahaan pada perusahaan non keuangan di Indonesia [Factors affecting firm value in non-financial companies in Indonesia]. Jurnal Bisnis dan Akuntansi, 21(1a-2), 153–162. http://jurnaltsm.id/index.php/JBA

Roychowdhury, S. (2006). Earnings management through real activities manipulation. Journal of Accounting and Economics, 42(3), 335–370. https://doi.org/10.1016/j.jacceco.2006.01.002

Ryan, N., & Suryanto. (2024). Pengaruh tax avoidance dan firm size beserta variable lainnya terhadap firm value [The effect of tax avoidance, firm size, and other variables on firm value]. E-Jurnal Akuntansi TSM, 4(1), 187–200. http://jurnaltsm.id/index.php/EJATSM

Santosa, P. W., Setianingrum, A., & Yusuf, C. (2022). Corporate governance and leverage on firm value: Evidence of Indonesian large firms. Jurnal Keuangan dan Perbankan, 26(4), 862–873. https://doi.org/10.26905/jkdp.v26i4.7664

Saputri, C. K., & Giovanni, A. (2021). Pengaruh profitabilitas, pertumbuhan perusahaan dan likuiditas terhadap nilai perusahaan [The effect of profitability, company growth, and liquidity on firm value]. Journal of Management Studies, 15(1), 90–108.

Sari, D., & Sanjaya, R. (2018). Pengaruh good corporate governance dan karakteristik perusahaan terhadap nilai perusahaan [The effect of good corporate governance and company characteristics on firm value]. Jurnal Bisnis dan Akuntansi, 20(1), 21–32. https://doi.org/10.34208/jba.v20i1.404

Sekaran, U., & Bougie, R. (2020). Research methods for business: A skill-building approach (8th ed.). Wiley.

Sembiring, S., & Trisnawati, I. (2019). Faktor-faktor yang memengaruhi nilai perusahaan [Factors affecting firm value]. Jurnal Bisnis dan Akuntansi, 21(1), 119–130. https://doi.org/10.34208/ejatsm.v3i1.1897

Serly, & Yuliani, N. (2024). The effect of tax avoidance on firm value. Jurnal Akuntansi, 8(1), 78–89. https://doi.org/10.4108/eai.10-10-2023.2342208

Simamora, A. J., Atika, & Muqorobin, M. M. (2022). Real earnings management and firm value: Examination of costs of real earnings management. Jurnal Akuntansi, 26(2), 240–262. https://doi.org/10.24912/ja.v26i2.935

Steven, & Suparmun, H. (2024). Faktor-faktor yang mempengaruhi nilai perusahaan non keuangan di Bursa Efek Indonesia [Factors affecting the value of non-financial companies on the Indonesia Stock Exchange]. Jurnal Bisnis dan Akuntansi, 4(2), 55–65. https://doi.org/10.24905/mlt.v4i2.62

Umam, D. C., & Halimaah, I. (2021). The influence of institutional ownership, independent commissioners, dividend policy, debt policy, and firm size on firm value. Priviet Social Sciences Journal, 1(1), 20–28

Wahyu, A., & Prayoga, H. (2023). Profitabilitas, kepemilikan institusional dan nilai perusahaan: Dampak pandemi Covid-19 [Profitability, institutional ownership, and firm value: The impact of the Covid-19 pandemic]. Jurnal Bisnis dan Akuntansi, 25(2), 337–350.

Winarsih, Najihah, N., & Setyawan, H. (2024). Board, institutional ownership and firm value. International Journal of Accounting, Management, And Economics Research, 2(2), 96–105.