Earnings Persistence and Its Determinants The Moderating Role of Good Corporate Governance in Non-Cyclical Manufacturing Firms
Keywords:
Earnings Persistence, Book-Tax Differences, Operating Cash Flow, Good Corporate GovernanceAbstract
This study examines the effect of book–tax differences, operating cash flow, leverage, and firm size on earnings persistence, as well as the moderating role of good corporate governance in non-cyclical manufacturing companies listed on the Indonesia Stock Exchange during the 2020–2024 period. Using panel data regression and moderated regression analysis, the results show that book–tax differences, operating cash flow, leverage, and firm size have a positive and significant effect on earnings persistence. Furthermore, good corporate governance significantly weakens the relationship between book–tax differences and earnings persistence, indicating its role in reducing information risk arising from accounting–tax disparities. Good corporate governance also strengthens the effect of leverage on earnings persistence, suggesting that effective governance mitigates financial risk associated with debt usage. However, good corporate governance does not moderate the effects of operating cash flow and firm size on earnings persistence. Overall, the findings highlight the importance of financial fundamentals and corporate governance in supporting sustainable earnings quality.
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