Corporate Governance, Asset Structure, Institutional and Managerial Ownership on Real Earnings Management Indonesia Energy Firms

Purpose: This study examines the effect of corporate governance, asset structure, institutional ownership, and managerial ownership on Real Earnings Management (REM) in energy sector companies listed on the Indonesia Stock Exchange during 2020–2024.

Research Methodology: A quantitative approach is applied using panel data regression with the Fixed Effect Model (FEM). The sample consists of 47 energy companies selected through purposive sampling, producing 235 observations. REM is measured using abnormal production costs. Independent variables include Corporate Governance (CG), Asset Structure (AS), Institutional Ownership (IO), and Managerial Ownership (MO). Data are obtained from annual reports and audited financial statements and analyzed using EViews, supported by Chow, Hausman, and LM tests.

Results: The findings show that asset structure has a positive and significant effect on REM. Meanwhile, corporate governance, institutional ownership, and managerial ownership do not significantly affect REM. The model explains 63.08% of REM variation (Adjusted R² = 0.6308), indicating strong explanatory power.

Conclusions: Real earnings management in Indonesian energy companies is primarily driven by firm resource characteristics rather than governance or ownership mechanisms, supporting Resource Dependence Theory.

Contributions: This study integrates Agency Theory and Resource Dependence Theory, focuses on the under-researched energy sector, and provides an integrated model of governance, ownership, and asset structure in explaining REM behavior.

Limitations: The study is limited to one sector, a five-year period, a single REM proxy, and board size as the sole governance indicator, which may limit generalizability.