The Role of Trust in Effecting the Firm Performance and Human Capital to Earning Quality with Trust for Indonesia, Phillipines and Thailand Banks

Abstract

This study investigates the influence of firm performance and human capital on the earnings quality with trust as moderating variable, uses an internal factors as a predictor of earnings quality, the population of this research are listed banks in Indonesia, Thailand and Philippines on 2010-2014 period. Earnings quality is measured by Thomson Reuter. The Firm performance is measured by a proxy for earnings asset securities and reinvestment rate (Maherani et al., 2014). Human capital is measured by a proxy of total labor costs divided by net interest income (Mojtahedi, 2013). The results showed that firm performance and significant positive effect on the earnings quality. Human capital proved positive and significant impact on the earnings quality and trust proved to be a good moderating variable and the results also provide implications such as (1) customer acceptance, it can be used as new measurement for firm performance and earning quality, and (2) trust as additional indicator for banking regulation by Financial Regulator.

Keywords:  firm performance, human capital, trust, earnings quality