WSEAS Transactions on Business and Economics
Print ISSN: 1109-9526, E-ISSN: 2224-2899
Volume 23, 2026
CEO Power and Firm Value: Do Earnings Management Practices Matter?
Authors: , ,
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Abstract: The purpose of this study is to examine the role of earnings management in mediating the relationship between CEO power and firm value. This study uses a quantitative approach, with the data population consisting of manufacturing companies listed on the Indonesia Stock Exchange (IDX) from 2018-2023. Data analysis in this study employs the Structural Equation Model (SEM) approach with the Partial Least Square (PLS) method using WarpPLS 8.0 software. The study’s findings and hypothesis testing reveal that CEO power has a negative effect on firm value. The results also show empirical evidence that CEO power has a positive effect on earnings management. Furthermore, the results indicate that earnings management acts as a mediator that strengthens the relationship between the CEO and firm value.
Keywords:
Expert Power, Ownership Power, Prestige Power, Earnings Management, Firm Value, Agency Theory, Structural Equation Model (SEM)
Pages: 102-112
DOI: 10.37394/23207.2026.23.9