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Journal : Majapahit Journal of Islamic Finance and Management

Working Capital Management as a Mediator of the Corporate Governance–Performance Relationship: Evidence from Indonesia Priyono, Achmad Agus; Widarko, Agus; Saraswati, Ety
Majapahit Journal of Islamic Finance and Management Vol. 5 No. 2 (2025): Islamic Finance and Management
Publisher : Department of Sharia Economics Institut Pesantren KH. Abdul Chalim Mojokerto

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.31538/mjifm.v5i2.520

Abstract

This study examines the moderating role of working capital management in the relationship between corporate governance mechanisms, specifically independent commissioners and ownership structure, and firm performance, as measured by Return on Equity (ROE). The analysis is based on panel data from consumer goods manufacturing companies listed on the Indonesia Stock Exchange (IDX) from 2020 to 2023. Using a quantitative explanatory approach and Partial Least Squares Structural Equation Modeling (PLS-SEM) via WarpPLS 7.0, this study finds that independent commissioners have a significant adverse effect on ROE. At the same time, ownership concentration shows a negative but statistically insignificant effect. Meanwhile, working capital management, proxied by the average payment period (APP), has a significant positive impact on ROE, but does not moderate the relationship between governance mechanisms and firm performance. These findings highlight that structural governance components alone do not guarantee improved financial performance unless accompanied by functional and competent internal financial practices. Theoretically, this study contributes to agency Theory and resource dependence Theory by demonstrating that symbolic governance structures tend to undermine firm value in emerging markets with weak institutional enforcement.
Co-Authors Abdul Kodir Djaelani Abdul Qodir Djaelani ABS, M Khoirul Adis Fransiska Romadhon Aditya Firmansyah Dimas Riadi Afi Rachmat Slamet Afifah Ardiyanti Pramesti AH. Hifni Ahmad Junaidi Ahmad Nurdin Ainun Rahmatulloh Aisyah Wulandari Akhmad Farikhin Al Amin, Rintan Anastasya Aleria Irma Hatneny Alfin Aulia Rahman Alif Sholahudin Sumantri Alviona Alviona Amalia, Putri Hafida Amalyani, Meifiana Aminulloh, Mohammad Faris Andi Normaladewi Andy Prasetya Budy Nugroho Annisa Abidah Al-Rahma Apriliani Dewi Kurniawati Ari Kartiko Arini Fitria Mustapita Arsyianto, Muhammad Tody Ashar Ashar Asnawati, Zubaidah Ajeng Asrori Tamam Audi Hani Setiawati Aziz, Achmad Ridwan Abdul Bastomi, Mohamad Desiy Ema Sakiyah Desy Wulandani Dewi Masitah Diajeng Kusuma Wardani Dimas, Moh Fahrezi Dina Alfina Helmania Putri Djuariyah Djuariyah Eli Aliyana Enita yuliasari Enjelita, Yayang Erlista, Silfa Eva Ruswinda Evi Rahmawati Lazuardini Fahmi Aldian Yuhanata Fahrurrozi Rahman Farhan Fani Ihsan Fatkhul Akmal Maulana FATMATUL MAS’AMAH Fatmawati Fatmawati Fazzira, Amanda Dilla Fa’jiah, Cholifatul Fella Rizky Kurniawati Fidyani Anura Hidayati Fitrah Khairun Nisa Gita Lestari Hadi Sunaryo Hafidah Hafidah Hamzah Hamzah Hardiani Permata Sari Haryati Haryati Heni Pujiastuti Heri Mohammad Setiawan Hilya Salsabila Ichsanuddin Akbar Atma Saputra Iffatul Masrurah IMRO’ATUS SHOLIHAH Indri Ludyah Isma, Viona Aulia Ismail Hidayat Isnaini Firdayanti Istianah Liizzah Ita Athia Itna Ernas Iyan Hidayat Jeni Susyanti Kartika Rose Rachmadi Khalikussabir, Khalikussabir KHOIRUL ANWAR Khoirun Nisa’ Sri Agustin Kurniati Kurniati Lisfatin Nihla Loviana Risca Mandagi M Agus Salim M. Agus Salim M. Agus Salim Al Fathoni M.Agus Salim Maghfirah, Inayatul Mauhibur Rokhman Maulidatun Nikmah Mifthaul Hanan Millaningtyas, Restu Moh. Rizal Mohamad Efendi Mohamad Fathanudin Abas Mohammad Ainul Yaqin Mohammad Hasby Ashshiddiqi Muhamad Rihal Irsyada Muhammad Agus Muljanto Muhammad Agus Salim MUHAMMAD AGUS SALIM Muhammad Ajye Saputra Muhammad Ali Murtadho Muhammad Ariasa Muhammad Mansur N Rachma N. Rachma Nadia Nor Rohma Nanang Tri Nugroho Nasrudin Islam Neng Lina Sulastri Norliyana Norliyana Nova Ade Fajar Wijaya Nur Atika Zuchrufillah Nur Eni Suhudi Nur Hidayati Nur Mahfudh Febriansyah Nurfarida Nurfarida Nurhidayah Nurhidayah Nurqomaria Nurqomaria Nurus Sofi Olivier, Kevin Pratiwi, Dinda Intan Prayoga, Ahmad Danang Putra, Dicky Pratama Putri, Fira Selfiana Qolbi, Syafira Naurin Rachman, Muchammad Zidane Rafi, Syahfri Amirul Rahmat Hidayat Rana, Dhifah Tsabitah Reny Afrevita Restu Millaningtyas Restu Millaningtyas Retno Damayanti Soejoedono Revita Dwi Putri Riza Eka Pratama Rizky Amelia Husniyah Rohmah, Dikri Minatur Rois Arifin Ronny Malavia Mardani Ronny Malavia Mardani Rony Malavia Mardani Rosaliana, Hilda Angeningtyas Rovita Tri Rezeki Rozul, Risky Nada Sania, Nila Alin Saraswati, Ety Satria Putra Utama Satria Putra Utama Silfi Wahyu Firdayanti Sinta Fathiyar Maulida Siti Maghfirotul Ummah Siti Nur Afiyah Soerya Mahatma Wisnoe Subhan Riadi Sulton Sholehuddin, Sulton Sunaryo, Hadi Susanto Susanto Susilo, Agung Syahrul Nur Rizky Syamsul Ibad Tanari, Vika Taufiqulhakum, M Fadhila Titian Nurmaulidia TITIN APRIATI Tsania Mutamassikah Biddin Nasir Ulfa Afrianti Umi Haniatul Faridah Uun Nur Laila Via Ainun Nur Habibah Vivin Ulfiantari Agustina Wahyu Irawan Wahyudi, Rochman Wanda Yunita Pramesti Widarko, Agus Wulan Setyo Rini Yesi Umita Sari Yesri Rahma Mediantin Yogi Adetya Kurniawan Yulianah Yulianah Yuni Rahmawati Yusvita Pavita Syamsudin Zakia Ilhami Zulkifli Zulkifli Zuqni Fitri Astuti