Earnings Quality, Asymmetric Information, and Market Response : Insights from Indonesia

Authors

  • Puji Wibowo  Faculty of Economics and Business, Trisakti University and Lecturer of Polytechnic of State Finance STAN, Indonesia
  • Etty Murwaningsari  Faculty of Economics and Business, Trisakti University, Indonesia

DOI:

https://doi.org/10.32628/IJSRST207663

Keywords:

Asymmetric Information, Cumulative Abnormal Return, Earnings Quality, Independence Board

Abstract

This study aims to investigate the impact of earnings quality and asymmetric information on market reaction which is proxied by cumulative abnormal return (CAR). This study also attempts to analyze whether good governance is playing an important role in moderating the effects of those two independent variables on CAR. By using purposive sampling method, this study covers 125 manufacturing companies listed on Indonesian Stock Exchange for 2017-2018 period to reveal above agenda. By using generalize least square (GLS) fixed effect model, it is found that reported earnings on financial statement have meaningful information for investors. By this, investors could expect stock return by relying on this earning information. Meanwhile, asymmetric information also matters for investors to make decisions regarding stock transaction. However, independence commissioner which is predicted to have an important role for stock performance, is not proved as moderating variable in this study.

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International Journal of Scientific Research in Science and Technology

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Published

2020-12-30

Issue

Volume 7, Issue 6, November-December-2020

Section

Research Articles

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[1]
Puji Wibowo, Etty Murwaningsari "Earnings Quality, Asymmetric Information, and Market Response : Insights from Indonesia" International Journal of Scientific Research in Science and Technology(IJSRST), Online ISSN : 2395-602X, Print ISSN : 2395-6011,Volume 7, Issue 6, pp.377-395, November-December-2020. Available at doi : https://doi.org/10.32628/IJSRST207663