The influence of capital structure and operational performance on financial performance with governance and financial risk as mediation in Insurance Companies in Indonesia

Ahmad Sumarlan, Kamaluddin Kamaluddin, Fachruzzaman Fachruzzaman and Robinson Robinson
Additional contact information
Ahmad Sumarlan: Universitas Muhammadiyah Bengkulu
Kamaluddin Kamaluddin: Universitas Bengkulu
Fachruzzaman Fachruzzaman: Universitas Bengkulu
Robinson Robinson: Universitas Bengkulu

Journal of Economics and Business Letters, 2024, vol. 4, issue 1, 54-70

Abstract: This study examines the influence of capital structure and operational performance on financial performance, with governance and financial risk as mediators. The sam- ple for this research comprises insurance companies listed on the Indonesia Stock Exchange in 2013-2021 with a total of 72 firm-year observations. The data used are secondary data obtained from annual and financial reports accessed via idx.co.id. The independent variables are capital structure, measured using the Debt Equity Ratio (DER), and operational performance, measured using liquidity. The mediating variable is the governance variable, measured by the independent board of directors (DKI), and financial risk is measured using Risk Based Capital (RBC). The depen- dent variable in this study uses financial performance as measured by Return On Assets (ROA). The results prove the following: (1) Capital structure has a positive and significant effect on financial performance. (2). Operational performance has a negative and significant effect on financial performance. (3). Capital structure had a positive and significant effect on DKI. (4) Operational performance has a significant negative effect on financial risk. (5) DKI does not mediate the influence of capital structure on financial performance. (6) Financial risk fully mediates the influence of operational performance on financial performance. (7). DKI has a negative and significant effect on financial performance. (8). Financial risk has a negative and significant effect on financial performance.

Keywords: Capital structure; operational performance; governance; financial risk; financial performance (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://journal.privietlab.org/download.php?id=751 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:prv:jeblpv:305

Ordering information: This journal article can be ordered from
https://journal.priv ... EBL/article/view/305

DOI: 10.55942/jebl.v4i1.305

Access Statistics for this article

More articles in Journal of Economics and Business Letters from Privietlab Research Center
Bibliographic data for series maintained by Mochammad Fahlevi ().