Year: 2024
Type: article
Abstract: This study discusses the effect of earnings management on stock market reactions to stock split events on the Indonesia Stock Exchange. Market reactions to stock split announcements vary and can be caused by asymmetric information between managers and shareholders, where managers may take advantage of stock splits to divert attention from actual performance by conducting earnings management. This study aims to examine whether earnings management that increases earnings affects market reactions to stock split announcements, with the hope of providing empirical evidence regarding the relationship between earnings management and market reactions to stock split events. The sample in this study was a company that carried out a stock split from 2018-2022 listed on the Indonesia Stock Exchange. The purposive sampling method was used in this study, and 35 samples were obtained. The data analysis technique used in this study was logistic regression analysis. The results of this study indicate that earnings management that increases profits has a positive effect on market reactions to stock split events. This means that the higher the level of earnings management that increases profits, the greater the possibility of an increase in positive reactions when a stock split occurs.
Language: English
Subfield: Accounting
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4406950971