The Moderating Effects of Economic Growth on the Relationships Between Related Party Transactions, Profitability, Audit Committee and Firm’s Value

Abstract

This study aims to determine the influence of related parties, profitability, committee on firm value, through the mediating role of economic growth. We conducted research on 40 companies of various industrial subsectors on the Indonesia Stock Exchange (IDX), over a period of  3 years (2016 to 2018), and the analysis model are Multivariate Regression and Moderating Regression Analysis (MRA).

The empirical findings of this study are that the disclosure of related party transactions has an effect on firm’s value, while profitability has no effect on firm’s value, then the audit committee has no effect on firm’s value. The results of this study also indicate that economic growth can moderate the effect of related party disclosure on firm’s value, but it does not have a role in the relationship between profitability and the audit committee on firm’s value.