The Impact of Working Capital, Capital Structure, and Firm Size on Profitability of Publicly Listed State-Owned Enterprises: The Moderating Role of Public Ownership
DOI:
https://doi.org/10.38035/dijdbm.v7i5.7292Keywords:
Profitability, Working Capital, Capital Structure, Firm Size, Public Ownership, State-Owned Enterprises, Moderated Regression AnalysisAbstract
This study examines the effects of working capital, capital structure, and firm size on profitability, measured by Return on Assets (ROA), and investigates whether public ownership moderates these relationships in publicly listed Indonesian state-owned enterprises (SOEs). The study uses a quantitative design and Moderated Regression Analysis (MRA) on 18 non-banking SOEs listed on the Indonesia Stock Exchange in 2024, selected through purposive sampling. The direct-effect model shows that working capital has a positive and significant effect on profitability, while capital structure and public ownership do not have significant direct effects. Firm size also has a positive and significant effect on profitability. In the moderation model, the interaction between capital structure and public ownership is negative and significant, whereas the interactions between working capital and public ownership and between firm size and public ownership are not significant. The moderated model explains 76.7% of the variation in profitability based on the adjusted R-squared, and the overall model is statistically significant. The findings indicate that profitability among listed SOEs is strongly associated with internal resource management, particularly working capital and organizational scale, while public ownership functions primarily as a governance mechanism that changes the relationship between financing decisions and profitability
References
Alabdullah, T. T. Y. (2021). Ownership structure and firm performance: Evidence from emerging markets. Journal of Governance and Regulation, 10(4), 8–19.
Alarussi, A. S., & Gao, X. (2021). Determinants of profitability in emerging markets. International Journal of Finance & Economics, 26(4), 5676–5691.
Badan Pusat Statistik. (2024). Statistik keuangan badan usaha milik negara dan badan usaha milik daerah 2024. BPS Indonesia.
Baños-Caballero, S., García-Teruel, P. J., & Martínez-Solano, P. (2016). Financing of working capital requirement, financial flexibility and SME performance. Journal of Business Economics and Management, 17(6), 1189–1204.
Brigham, E. F., & Houston, J. F. (2019). Fundamentals of financial management (15th ed.). Cengage Learning.
Bui, H. T. M., Nguyen, A. H., & Pham, T. T. H. (2020). Capital structure and firm performance in emerging economies. Journal of Asian Finance, Economics and Business, 7(10), 1–10.
Doğan, M. (2019). Does firm size affect the firm profitability? Evidence from Turkey. Research Journal of Finance and Accounting, 4(4), 53–59.
Evelyne, T., Imelda, E., & Hidajat, N. C. (2024). The effect of capital structure on firm value with profitability as variable mediator in industrial companies listed on the IDX. International Journal of Application on Economics and Business, 2(3), 227–235.
Febriyanti, N. P. L., & Hasibuan, H. T. (2025). The relationship between capital structure and profitability with firm value: A study of LQ45 index companies listed on the Indonesia Stock Exchange. International Journal of Economics, Management and Accounting, 2(4), 233–250.
Gitman, L. J., & Zutter, C. J. (2019). Principles of managerial finance (15th ed.). Pearson.
Hidayat, I., & Dewi, F. O. S. (2022). Effect of liquidity, leverage, and working capital turnover on profitability. APTISI Transactions on Management, 7(1), 60–68.
Indrati, M., & Artikasari, L. A. (2023). Effect of leverage, company size and working capital turnover on firm value with profitability as mediation variable. Jurnal Ekonomi, 12(2), 611–624.
Kementerian Badan Usaha Milik Negara. (2024). Laporan kinerja BUMN tahun 2024. Kementerian BUMN Republik Indonesia.
Khajar, I., Hersugondo, H., & Udin, U. (2020). Working capital management, firm size and firm profitability. Management Science Letters, 10(1), 111–118.
Le, T. P. V., & Phan, T. B. N. (2021). Capital structure and profitability: Evidence from listed firms in Vietnam. Journal of Asian Finance, Economics and Business, 8(1), 137–145.
Martini, E., Ramli, M. A., Gustyana, T. T., & Nugraha, N. (2021). Impact of activity ratio, profitability, liquidity, and asset structure on capital structure. Jurnal Manajemen Indonesia, 21(2), 112–119.
Nainggolan, H., Siregar, N., & Simanjuntak, R. (2022). Pengaruh ukuran perusahaan terhadap profitabilitas pada perusahaan BUMN yang terdaftar di Bursa Efek Indonesia. Jurnal Keuangan dan Perbankan, 26(3), 415–428.
Nguyen, H. T., Nguyen, D. T., & Tran, M. D. (2020). Public ownership and corporate performance: Evidence from listed companies in Southeast Asia. Journal of Asian Business and Economic Studies, 27(3), 285–302.
Nguyen, T. H., Nguyen, H. T., & Nguyen, D. T. (2023). Working capital management and corporate performance: Evidence from emerging markets. Journal of Risk and Financial Management, 16(2), 1–17.
Nurwulandari, A. (2021). Effect of liquidity, profitability, firm size on firm value with capital structure as intervening variable. Atestasi: Jurnal Ilmiah Akuntansi, 4(2), 257–271.
Pham, H. T., & Nguyen, M. T. (2022). The impact of working capital management on firm profitability. Cogent Economics & Finance, 10(1), 1–15.
Putri, I. G. A. P. T. (2020). Effect of capital structure and sales growth on firm value with profitability as mediation. International Research Journal of Management, IT and Social Sciences, 7(1), 145–155.
Rahmawati, R., Wibowo, A., & Putra, D. (2024). Working capital management and firm profitability: Evidence from Indonesian listed companies. International Journal of Financial Research, 15(1), 75–89.
Reschiwati, R., Syahdina, A., & Handayani, S. (2020). Effect of liquidity, profitability, and size of companies on firm value. Utopia y Praxis Latinoamericana, 25(6), 325–332.
Ross, S. A., Westerfield, R. W., & Jordan, B. D. (2022). Corporate finance (13th ed.). McGraw-Hill Education.
Sugiyono. (2022). Metode penelitian kuantitatif, kualitatif, dan R&D (edisi terbaru). Alfabeta.
Vo, X. V., & Ellis, C. (2023). Firm size and financial performance: Evidence from ASEAN countries. Sustainability, 15(4), 1–18.
Welly, W. (2025). The effect of capital structure, firm age, firm size, asset structure, liquidity, and financial slack on profitability. Journal of Taxation, Economics and Public Policy, 3(1), 1–15.
Yuliani, D., & Prasetyo, H. (2024). Public ownership, corporate governance, and profitability: Evidence from Indonesian listed firms. Journal of Accounting and Investment, 25(2), 245–262.
Zhang, Y., Wang, X., & Liu, J. (2023). Ownership structure and firm performance in emerging economies. Corporate Governance: The International Journal of Business in Society, 23(5), 1054–107
Downloads
Published
Issue
Section
License
Copyright (c) 2026 Yusniar Ilyas Prasetia, Aam Bastaman
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors who publish their manuscripts in this journal agree to the following conditions:
- The copyright on each article belongs to the author(s).
- The author acknowledges that the Dinasti International Journal of Digital Business Management (DIJDBM) has the right to be the first to publish with a Creative Commons Attribution 4.0 International license (Attribution 4.0 International (CC BY 4.0).
- Authors can submit articles separately, arrange for the non-exclusive distribution of manuscripts that have been published in this journal into other versions (e.g., sent to the author's institutional repository, publication into books, etc.), by acknowledging that the manuscript has been published for the first time in the Dinasti International Journal of Digital Business Management (DIJDBM).
