Government Ownership, Leverage, and Financial Performance of Indonesian State-Owned Construction Enterprises: The Mediating Role of Efficiency
DOI:
https://doi.org/10.65336/WJEBM.2026.31104Keywords:
Efficiency, government ownership, leverage, return on assets, State-owned construction enterprisesAbstract
This study examines the effect of government ownership and leverage on financial performance, with efficiency as an intervening variable, in state-owned construction enterprises (BUMN Karya) listed on the Indonesia Stock Exchange. The sample comprises seven companies selected by purposive sampling and observed from 2021 to 2025, giving 35 observations. Government ownership is measured by the state’s share percentage, leverage by the debt to equity ratio (DER), efficiency by the operating cost ratio, and financial performance by return on assets (ROA). The data were analyzed using panel data regression and the Sobel test. The results show that DER has a positive effect on the operating cost ratio (coefficient 0.019, p < 0.001), and the operating cost ratio has a negative effect on ROA (coefficient −0.284, p < 0.001). DER has no direct effect on ROA but affects it indirectly through efficiency (Sobel z = −2.64, p = 0.008), indicating full mediation. Government ownership affects neither efficiency nor ROA. These findings indicate that debt restructuring of state-owned construction enterprises must be accompanied by improvements in operating efficiency for financial performance to recover.
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