THE EFFECT OF EARNINGS PERSISTENCE, SYSTEMATIC RISK, AND CONSERVATISM ON EARNINGS RESPONSE COEFFICIENT

Abstract

The purpose of this study is to empirically examine the factors that affect the earnings response coefficient. This study uses independent variables earnings persistence, company growth, systematic risk, capital structure, profitability, conservatism and earnings response coefficient (ERC) as the dependent variable. The study was conducted on 43 manufacturing companies listed on the Indonesia Stock Exchange from 2017 to 2019 which were obtained using purposive sampling method. Samples and data were tested and analyzed using multiple regression methods. The results of this study indicate that company growth has a negative effect on earnings response coefficient. While earnings persistence, systematic risk, capital structure, profitability, and conservatism have no effect on earnings response coefficient.