An Empirical Study of the Impact of Accounting Conservatism and Ownership Structure on Firm Performance in Indonesia

Listyorini Wahyu Widati, Bambang Sudiyatno, Titiek Suwarti and Kis Indriyaningrum

Business Perspectives and Research, 2025, vol. 13, issue 2, 266-278

Abstract: This study aims to investigate the impact of accounting conservatism and ownership structure on the firm performance of Indonesian active manufacturing companies. To achieve this goal, 44 qualified manufacturing companies were used as a sample of the 153 manufacturing companies in Indonesia. The data collection method was preceded by conducting surveys and observations to determine the purposive sampling method as the method used for data collection and data analysis using multiple regression. The company’s ability to use asset resources and equity to generate net income is used as a measure of firm performance. The results of the analysis using the multiple regression method in regression Equation 1 show that accounting conservatism and foreign ownership have a positive effect on return on assets, while managerial ownership and institutional ownership have no effect on return on assets. Similarly, the analysis result of Equation 2 shows that accounting conservativeness and foreign ownership have a positive effect on the return on equity, while managerial ownership and institutional ownership have no effect on the return on equity.

Keywords: Accounting conservatism; foreign ownership; institutional ownership; managerial ownership; ownership structure; firm performance (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:sae:busper:v:13:y:2025:i:2:p:266-278

DOI: 10.1177/22785337221148544

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