Financial reporting quality, ownership structure and investment efficiency

Purpose: This study analyzes the relationship between financial reporting quality, ownership structure, and investment efficiency in Indonesian firms using data from the Indonesia Stock Exchange (2019–2023). It aims to provide insights into financial transparency and ownership concentration in emerging markets, offering recommendations to improve investment efficiency. Methodology/approach: A quantitative causal approach is used to analyze non-financial companies listed on the Indonesia Stock Exchange (IDX) from 2019–2023. Purposive sampling selected 100–150 companies with complete financial data. Investment efficiency is measured using residual-based methods, while financial reporting quality and ownership concentration are evaluated through proxies. Descriptive statistics and multiple linear regression are applied, with firm size and leverage as controls. Findings: The study finds no significant influence of financial reporting quality, ownership concentration, or their combined effect on investment efficiency. Contextual factors, such as weak governance, concentrated ownership, and cultural dynamics, contribute to these results, highlighting the need for regulatory reforms and additional variables. Practical and Theoretical contribution/Originality: The study emphasizes the importance of broader variables, such as economic stability, tax regulations, and market dynamics, in improving investment efficiency. It contributes by underscoring the role of corporate governance and cultural factors in shaping investment outcomes. Research Limitation: The study focuses on IDX-listed non-financial companies (2019–2023) and excludes factors like debt maturity, ESG disclosures, and technological advancements. Future research should include these variables to enhance understanding.