Analysis of the Influence of Foreign Ownership on Financial Performance in the Telecommunication Industry
DOI:
https://doi.org/10.38035/dar.v1i3.1802Keywords:
Foreign Ownership, Financial Performance, Telecommunications, Indonesia Stock Exchange, Corporate Governance, Moderating Variables, ROA, ROE, Company Size, Leverage, Growth OpportunitiesAbstract
The impact of foreign ownership on the financial performance of telecommunications companies listed on the Indonesia Stock Exchange (IDX) is analyzed in this research. Using panel data from 2015 to 2023, key financial performance indicators such as Return on Assets (ROA), Return on Equity (ROE), and Profit Margin are examined. Moderating variables, including company size, leverage, and growth opportunities, are also considered. The analysis reveals a significant positive relationship between foreign ownership and financial performance. Companies with higher foreign ownership tend to show better asset utilization (ROA) and greater profitability (ROE). Additionally, moderating factors play a critical role: larger companies benefit more from foreign ownership, while high leverage negatively impacts the relationship between foreign ownership and financial performance. The findings suggest that managing leverage and seizing growth opportunities are key for maximizing the benefits of foreign investment. Encouraging foreign investment in Indonesia's telecommunications sector could enhance its competitiveness and overall performance. This research contributes to the understanding of foreign ownership and offers valuable insights for policymakers and business leaders in emerging markets.
References
Aftab, A., Iqbal, N., & Shahzad, M. (2019). The relationship between foreign ownership and corporate performance in emerging markets: Evidence from Pakistan. Emerging Markets Finance and Trade, 55(4), 813-829. https://doi.org/10.1080/1540496X.2019.1588583
Alon, I., & McIntyre, J. R. (2015). Foreign direct investment in emerging markets: Theoretical and empirical evidence. Journal of International Business Studies, 46(5), 681-708. https://doi.org/10.1057/jibs.2015.8
Al-Salem, F. (2020). The role of foreign direct investment in telecommunications: A global overview. Telecommunications Policy, 44(3), 101907. https://doi.org/10.1016/j.telpol.2020.101907
Bekaert, G., & Harvey, C. R. (2017). Emerging markets finance. Journal of Empirical Finance, 41, 1-10. https://doi.org/10.1016/j.jempfin.2017.01.001
Dewi, R. (2017). Foreign direct investment in Indonesian telecommunications: Examining its effects on financial performance. Journal of Development Economics and Finance, 15(4), 123-134.
Fitrani, E., & Yulianti, N. (2016). The effect of foreign ownership on firm performance in Indonesia: Evidence from the telecommunications sector. Indonesian Journal of Business and Economics, 11(2), 70-85.
Gunawan, D., & Nasution, A. (2018). Corporate governance and foreign ownership: Impact on financial performance of Indonesian telecommunications firms. Journal of Business and Economic Studies, 22(1), 99-113.
Hennart, J. F., & Park, Y. R. (2015). The effects of foreign ownership on corporate governance and performance: Evidence from the telecommunications industry. Journal of International Business Studies, 46(3), 357-376. https://doi.org/10.1057/jibs.2015.9
Harahap, M., & Maulana, E. (2019). Foreign ownership, corporate governance, and performance: A case study in Indonesia’s telecommunications industry. Indonesian Business Review, 26(1), 47-61.
Hadi, I. (2019). The role of foreign ownership in enhancing corporate performance in Indonesia’s telecommunications industry. Journal of Business Studies and Research, 18(2), 123-135.
Kurniawan, T. (2017). The impact of foreign ownership on the financial performance of companies listed on the Indonesia Stock Exchange. Journal of Management and Entrepreneurship, 19(2), 150-163.
Kusuma, P., & Irawan, R. (2016). Foreign ownership and profitability in Indonesian telecommunication companies: A study of performance metrics. Business and Economics Journal, 32(2), 142-155.
Li, J., & Vashishtha, R. (2015). The impact of foreign direct investment on corporate governance in emerging markets. Journal of Business Research, 68(4), 719-727. https://doi.org/10.1016/j.jbusres.2014.11.020
Mayer, C., & Wang, Y. (2017). The effect of foreign ownership on the performance of telecommunications firms: A study of China. Journal of Business Research, 80, 34-42. https://doi.org/10.1016/j.jbusres.2017.07.028
Putra, A. T. (2020). Analysis of the impact of foreign ownership on the financial performance of telecommunications companies in Indonesia. Journal of Indonesian Economy and Business, 34(1), 112-126. https://doi.org/10.22201/indeco.2020.0341.01
Pradana, S. (2020). Influence of foreign direct investment on financial performance in Indonesian telecom companies. Asian Economic Policy Review, 12(2), 99-110. https://doi.org/10.1111/aepr.12121
Purnama, R. & Syafrudin, M. (2018). Financial performance and corporate governance: The effect of foreign ownership on Indonesian firms. Journal of Financial Management, 14(2), 134-145.
Rachmawati, E. (2018). Foreign ownership and managerial independence in business decision-making: A study on Indonesian telecommunications companies. Journal of Economics & Business, 24(3), 78-91.
Suryani, E., & Hasibuan, F. (2020). Foreign direct investment and firm performance: Evidence from the Indonesian manufacturing sector. Journal of Indonesian Economy and Business, 35(3), 213-228. https://doi.org/10.1016/j.jieb.2020.06.003
Santosa, W., & Wijaya, A. (2015). Ownership structure and company performance in Indonesia: A study of foreign ownership in the telecom sector. Indonesian Economic Journal, 9(3), 160-172.
Tan, Y. (2013). The impact of foreign ownership on corporate governance and performance: Evidence from China. International Journal of Economics and Finance, 5(2), 150-158. https://doi.org/10.5539/ijef.v5n2p150
Wijaya, H., & Kurniawati, L. (2017). Foreign ownership and operational performance in the Indonesian telecommunications sector. Journal of Indonesian Business Management, 20(4), 195-207.
Widyatama, B., & Widyawati, T. (2016). The effect of foreign ownership on financial performance of Indonesian telecom companies: An empirical study. Journal of Indonesian Economy, 25(1), 89-98.
Wysocki, P. (2017). The impact of foreign direct investment on telecommunications performance. Journal of International Business, 29(3), 456-470. https://doi.org/10.1080/jib2017.0175475
Xu, Y., & Zhang, X. (2018). Corporate governance and firm performance: Evidence from the telecommunications industry in Asia. International Journal of Strategic Management, 16(2), 134-148. https://doi.org/10.1007/s11301-018-0011-7
Zhao, Q., & Zhang, L. (2019). The effect of foreign ownership on company performance in emerging markets. International Journal of Economics and Business, 16(4), 104-115. https://doi.org/10.1080/ijeb.2019.0123758
Zhang, T., & Liao, H. (2016). Effects of foreign ownership on firm performance in China's telecommunications sector. Telecommunications Management Review, 12(5), 312-325. https://doi.org/10.1080/jtmr.2016.523453
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Ridwan
This work is licensed under a Creative Commons Attribution 4.0 International License.
Copyright :
Authors who publish their manuscripts in this journal agree to the following conditions:
- Copyright in each article belongs to the author.
- The author acknowledges that the DAR has the right to be the first to publish under a Creative Commons Attribution 4.0 International license (Attribution 4.0 International CC BY 4.0).
- Authors can submit articles separately, arrange the non-exclusive distribution of manuscripts that have been published in this journal to other versions (for example, sent to the author's institutional repository, publication in a book, etc.), by acknowledging that the manuscript has been published for the first time at DAR.
