<![CDATA[Purpose – This study examines whether real earnings management (REM) explains the relationship between family ownership concentration and firm value in Indonesian non-financial firms. Prior studies focus on direct relationships, with limited mediation evidence.Methods – This study analyzes 957 firm-year observations of 319 family-controlled non-financial companies listed on the Indonesia Stock Exchange during 2022–2024. Family-controlled firms are identified using the ultimate ownership approach with a 10% ultimate family control threshold. REM is estimated using the Roychowdhury (2006) model. Panel data regression and Baron and Kenny’s (1986) causal-step logic are employed.Findings – Empirical results reveal that neither family ownership concentration β = 0.4513, p = 0.2980) nor REM (β = 0.0675, p = 0.4240) directly drives firm value in a statistically significant manner. Conversely, family ownership concentration exerts a positive effect on REM (β = 0.3473, p = 0.0270), indicating that firms with higher ultimate family control tend to engage in greater income-increasing REM. The mediation analysis does not support the mediating role of REM because REM is not significantly associated with firm value. Research implications – The findings indicate that profitability is consistently associated with firm value, whereas family ownership concentration and REM are not. Future studies may investigate alternative governance and monitoring mechanisms through which family ownership concentration may influence firm value. Originality – This study extends the literature by testing REM as a possible mechanism linking family ownership concentration and firm value, but finds no mediation.]]>
