The effect of financial and non-financial performance on investors’ reactions: The role of corporate governance mechanisms as moderating

Intadaviqotul Minakh, Erwin Saraswati and Abdul Ghofar
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Intadaviqotul Minakh: Accounting Department, Faculty of Economics and Business, Brawijaya University, Malang, Indonesia
Erwin Saraswati: Associate Professor(s), Accounting Department, Faculty of Economics ans Business , Brawijaya University, Malang, Indonesia
Abdul Ghofar: Associate Professor(s), Accounting Department, Faculty of Economics ans Business , Brawijaya University, Malang, Indonesia

International Journal of Research in Business and Social Science (2147-4478), 2021, vol. 10, issue 8, 47-56

Abstract: The purpose of this study is to examine the effect of financial and non-financial performance on investor reactions and the role of corporate governance mechanisms as moderating. The analysis technique used is the moderated regression analysis (MRA). The research population is manufacturing sector companies listed on the Indonesia Stock Exchange (IDX). Based on the purposive sampling method, 78 companies were selected as the samples (390 firm-year observations). The results of this study provide empirical evidence that the existence of financial and non-financial performance in a company can increase investor reactions. Institutional ownership plays a role in the relationship between financial performance and investor reactions. Meanwhile, independent commissioners, boards of directors, and audit committees have no role in the relationship between financial performance and investor reactions. And independent commissioners and institutional ownership can moderate the influence of non-financial performance on investor reactions. Meanwhile, the board of directors and audit committee cannot moderate the influence of non-financial performance on investor reactions. Key Words:Financial and non-financial performance, investor reactions, corporate governance

Date: 2021
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