The Relationship of Corporate Governance to Public Financial Performance in Samarinda, Indonesia
Abstract
The objectives of this study are to identify, analyze, and explain the direct and indirect relationships between exogenous and endogenous variables. This research method uses a quantitative approach with Partial Least Square (PLS). The data collection method used a Likert Scale Questionnaire with 4 points, namely strongly agree score 4, agree score 3, disagree score 2, and strongly disagree score 1, with no grey options. Purposive sampling was used for sample collection with 737 respondents. The results show that 1) stewardship is directly and indirectly positively and significantly related to sales growth, as well as net income; 2) corporate governance is directly and indirectly positively and significantly related to sales growth, and net income through sales growth; 3) corporate social responsibility is directly and indirectly positively and significantly related to sales growth and net profit; and 4) transparency is directly and indirectly positively and significantly related to sales growth and net income. We conclude that all exogenous variables are directly related to the endogenous variables. This study provides a novel approach by comprehensively examining both the direct and indirect relationships between stewardship, corporate governance, corporate social responsibility, and transparency with sales growth and net income. Unlike prior research, this study simultaneously integrates these factors using a large sample of 737 respondents, offering new insights into how these governance-related variables influence financial performance.
Keywords: financial performance, sales growth, net profit increase
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