Earnings Persistence and Its Determinants: The Moderating Role of Good Corporate Governance in Non-Cyclical Manufacturing Firms

Dilla Aisyah Putri; Djenni Sasmita

doi:10.55980/ebasr.v5i2.378

Authors

Dilla Aisyah Putri Faculty of Economics and Bussines, Muhammadiyah university of Tangerang, Tangerang, Indonesia
Djenni Sasmita Faculty of Economics and Bussines, Muhammadiyah university of Tangerang, Tangerang, Indonesia

DOI:

https://doi.org/10.55980/ebasr.v5i2.378

Keywords:

Earnings Persistence, Book–tax Differences, Operating Cash Flow, Leverage, Firm Size, Good Corporate Governance

Abstract

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 185 firm-year observations from 37 non-cyclical manufacturing firms selected through purposive sampling, the study employs panel data regression and moderated regression analysis. The results show that book–tax differences, operating cash flow, leverage, and firm size significantly affect earnings persistence. Furthermore, good corporate governance significantly weakens the relationship between book–tax differences and earnings persistence. Good corporate governance also strengthens the relationship between leverage and earnings persistence. However, good corporate governance does not moderate the effects of operating cash flow and firm size on earnings persistence. These findings show that corporate governance does not uniformly influence earnings persistence but conditionally alters the effects of specific financial characteristics, particularly book–tax differences and leverage.

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