The Role of Accounting Conservatism in Mediating between Ownership Structure and Firm Value: Evidence from Indonesia

Titiek Suwarti, Bambang Sudiyatno, Ida Nurhayati, Moch Irsad


This study examines the mediating effect of accounting conservatism on the relationship between ownership structure and firm value. The ownership structure is proxied by managerial ownership, institutional ownership, and foreign ownership. To achieve this goal, 44 manufacturing companies listed on the Indonesia Stock Exchange (IDX) from 2017 to 2019 were used as samples. The data used are panel data, a combination of time series and cross-section data. Data were collected using the purposive sampling method, and data analysis was carried out by path analysis. Path analysis results show that managerial ownership has a negative but not significant effect on accounting conservatism and firm value. Institutional ownership has a positive and significant effect on accounting conservatism and firm value. Foreign ownership has a positive but not significant effect on accounting conservatism but has a positive and significant effect on firm value. This research shows its novelty and authenticity as quantitative research on the role of accounting conservatism in influencing firm value, which looks similar to previous studies but is fundamentally different. An important finding in this study is that accounting conservatism acts as a mediating variable for institutional ownership in influencing firm value.


Keywords: accounting conservatism, firm value, foreign ownership, institutional ownership, managerial ownership.



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