The Influence of Liquidity, Leverage, Profitability, Growth Opportunity, Firm Size, and Profit Growth on Earning Response Coefficient with Institutional Ownership as a Moderation Variable

Abstract

This study aims to examine the effect of each variable liquidity ratio, leverage ratio, profitability ratio, growth opportunities, firm size, and profit growth on the earning response coefficient with ownership as a moderating variable. The research method used in this study is quantitative and serves as a verification descriptive study. The population in this study is the food and beverage sub-sector manufacturing companies listed on the Indonesia Stock Exchange in 2016-2020. The sampling technique used the purposive sampling method to obtain 18 food and beverage companies that match the criteria. The data analysis technique was carried out by panel data regression analysis using fixed effects, and the hypothesis was tested using the t-test. The results show that the liquidity ratio, growth opportunities, firm size, and profit growth partially have a negative and insignificant effect on the earnings response coefficient. The ratio of leverage and profitability partially and significantly affects the earnings response coefficient. Furthermore, the study results show that institutional ownership can moderate the relationship between liquidity ratios, leverage ratios, profitability ratios, growth opportunities, firm size, and profit growth to the earning response coefficient.