The Effect of Trust and Related Party Transaction on Firm Value

  • Raihan Ramadhani
  • Yossi Diantimala Universitas Syiah Kuala
  • Muhammad Arfan

Abstract

This study examines the effect of trust and related party transactions on firm value. Total observation in this study is 185 banking companies listed on the Indonesia Stock Exchange for the 2016-2020 period. Multivariate analysis is employed to test the hypothesis. The results illustrate that the trust and related party transactions have a positive and significant effect on firm value. This implies that the disclosure of the word ‘trust’ in the management discussion and analysis report (MD&A) reflects that the company's ethical culture and good management responsibility in managing the business convince investors to invest. The increase in debt-related party transactions shows that it is easier for the companies to receive funding to finance the company's operational activities and increase investment rather than making loans with the third parties that seems to be complicated to approach.

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Published
2022-07-27
How to Cite
RAMADHANI, Raihan; DIANTIMALA, Yossi; ARFAN, Muhammad. The Effect of Trust and Related Party Transaction on Firm Value. Jurnal Ilmiah Akuntansi dan Bisnis, [S.l.], v. 17, n. 2, july 2022. ISSN 2303-1018. Available at: <https://ojs.unud.ac.id/index.php/jiab/article/view/87027>. Date accessed: 14 aug. 2022.
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Articles