The Effect of Liquidity and Management Ability on Market Performance with Earning Management as an Intervening Variable

Abstract

Banking companies are service sector companies that act as intermediary institutions whose existence is very crucial in each country. Competition between banking companies is getting tighter, making every company increasingly trying to improve its performance. This study aims to examine the direct and indirect effect of the liquidity and management ability variables on market performance with earnings management as an intervening variable. This research was conducted on banking companies listed on the Indonesia Stock Exchange in the 2016-2019 period. The sampling technique was purposive sampling. This study uses path analysis. The test results show that (1) liquidity has an effect on market performance, (2) management ability has a positive effect on market performance, (3) earning management has no effect on market performance, (4) liquidity has an effect on earnings management, (5) ability management has no effect on earning management, (6) liquidity has no effect on market performance through earnings management, and (7) management ability does not affect market performance through earnings management.