Firm Performance: Exploring International Diversification, Financial Leverage, and Board of Directors in the Energy Sector
Abstract
This study aimed to analyze the impact of international diversification, financial leverage, and board of directors on the performance of energy sector companies listed on the IDX between 2018 and 2022. The research sample consisted of 54 energy sector companies selected using probability sampling with a simple random sampling approach. A total of 270 research sample units were obtained over a 5-year period. This study employed panel data regression with the Random Effect Model (REM) model, assisted by the E-Views 12 application, to analyze the data. The results indicate that the financial leverage variable has an impact on firm performance. However, the variables of international diversification and board of directors do not affect firm performance. Companies should prioritize cost control to avoid high leverage and evaluate the potential for international diversification without compromising their focus on core business segments. Additionally, optimizing the number of boards of directors as necessary can also be beneficial. This study makes a theoretical contribution by incorporating variables that are not typically integrated, such as international diversification, financial leverage, and board of directors.
Keywords
References
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DOI: https://doi.org/10.17509/jaset.v16i2.67756
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