The Effects of The Board of Directors, Institutional Ownership, Leverage, and Capital Structure on Financial Performance in Soes Listed on the IDX 2020-2024

Alisya Norma Qotrunnada; Agus Prayitno; Pradana Jati Kusuma; Almira Santi Samasta

doi:10.31851/jmwe.v23i2.21634

Authors

Alisya Norma Qotrunnada Universitas Dian Nuswantoro
Agus Prayitno Universitas Dian Nuswantoro
Pradana Jati Kusuma Universitas Dian Nuswantoro
Almira Santi Samasta Universitas Dian Nuswantoro

DOI:

https://doi.org/10.31851/jmwe.v23i2.21634

Abstract

The financial performance of state-owned enterprises (SOEs) for the 2020–2024 period shows an improving trend, with ROA increasing from 1.103 to 1.460 and leverage rising to 1.230 in 2022 before declining to 0.553 in 2023 and 0.577 in 2024. This study aims to analyze the influence of the Board of Directors, Institutional Ownership, Leverage, and Capital Structure on Financial Performance. The method used is a quantitative approach employing a Fixed Effects Model (FEM) panel data regression on 25 SOEs listed on the Indonesia Stock Exchange for the 2020–2024 period. The results indicate that the Board of Directors and Institutional Ownership do not have a significant effect on Financial Performance, Leverage has a significant negative effect on Financial Performance, while Capital Structure has a significant positive effect on Financial Performance. This study offers novelty by re-examining the influence of corporate governance and capital structure on financial performance across 25 SOEs listed on the Indonesia Stock Exchange during the 2020–2024 period using a Fixed Effects Model (FEM) panel data regression approach to address the inconsistencies in previous research findings. SOE management needs to manage leverage more carefully and maintain the capital structure ratio so that the company’s financial performance can remain stable and sustainable.

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