Financial Reporting Quality, Debt Maturity, and Investment Efficiency: The Moderating Role of Institutional Ownership

Abstract

Investment is a step a company takes to use available funds to obtain future profits. An investment is said to be efficient if its results are as expected and planned and there are no conditions of investment inefficiency, namely conditions of underinvestment or overinvestment. This research is quantitative research that uses secondary data sourced from the IDX. The data used are financial reporting quality ratios, debt maturity levels, investment efficiency   and   institutional ownership   in   manufacturing   industrial   companies registered with JII during the 2018-2022 period. The research method uses multiple regression analysis and the MRA (Moderate regression analysis) test with the IBM SPSS Statistics 22 application.

The research results show that the variable ratio of financial reporting quality and debt maturity level have a partial and simultaneous effect on investment efficiency. Meanwhile, the results of the MRA test show that institutional ownership is not able to moderate the influence of financial reporting quality on investment efficiency, but institutional ownership can moderate the influence of debt maturity levels on investment efficiency.