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THE EFFECT OF COMPANY SIZE, LEVERAGE, AND CAPITAL STRUCTURE ON EARNING RESPONSE COEFFICIENT IN PRIMARY CONSUMER GOODS SECTOR COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGE YEAR 2018-2021

Abstract

This study examines primary consumer goods sector companies listed on the Indonesian Stock Exchange during the 2018–2021 period. The purpose of this study is to analyze the impact of company size on the Earnings Response Coefficient (ERC), as well as to test the effects of leverage and capital structure on the Earnings Response Coefficient of primary consumer goods sector companies listed on the Indonesian Stock Exchange for the 2018–2021 period. In addition, this study investigates the simultaneous effects of company size, leverage, and capital structure on the Earnings Response Coefficient. Quantitative methods are employed in this study. Documentation is used as the data collection method, specifically secondary data in the form of annual financial reports obtained from companies. The population of this study consists of 119 issuers in the primary consumer goods sector listed on the Indonesian Stock Exchange between 2018 and 2021. Purposive sampling is applied to select 66 issuers as the research sample. Multiple regression analysis, classical assumption testing, descriptive statistical analysis, and hypothesis testing are used as the data analysis techniques. The findings of this study indicate that during the 2018–2021 period, the Earnings Response Coefficient of primary consumer goods sector companies listed on the Indonesian Stock Exchange is positively influenced by company size. For the 2018–2021 period, leverage also has a positive effect on the Earnings Response Coefficient of primary consumer goods sector companies listed on the Indonesian Stock Exchange. Furthermore, companies in the primary consumer goods sector listed on the Indonesian Stock Exchange have an advantage in terms of their Earnings Response Coefficient due to their capital structure. Simultaneously, company size, leverage, and capital structure have a positive effect on the Earnings Response Coefficient of primary consumer goods sector companies listed on the Indonesian Stock Exchange for the 2018–2021 period.