Page 199 - SUSTAINABILITY ISSUES & COVID-19

5. CONCLUSIONS, LIMITATIONS, AND IMPLICATIONS

This research assesses sustainability, looking more at the aspect of financial performance. This research finds that the
financial performance of SOEs from year to year has decreased so that the first hypothesis is accepted. The DAR ratio
from 2013 to 2019 is increasing, on the other hand, the EAR ratio is decreasing and the lowest is in 2019, with an EAR of
31.66%. ROA and ROE have a downward trend from 2013 to 2019.
The results of this research also show that the financial performance of SOEs and non-SOEs is significantly different; this is
supporting the second hypothesis. The ROA and ROE ratios are significant for SOEs than non-SOEs, but the leverage ratio,
namely debt to assets, is significantly larger by SOEs than non-SOEs. The equity per asset ratio is significantly smaller for
SOEs than for non-SOEs. Also, the percentage of ownership of the Government of the Republic of Indonesia has decreased
from year to year and has an average of 62.12%. This means that the effective ownership of the Government of Indonesia
to SOEs is 19.67% (62.12% x 31.66%). Based on the results of the effective ownership of the Government of Indonesia to
SOEs, the sustainability of the sovereignty of the Government of Indonesia over SOEs is questionable. Most of the high
returns on SOEs are for creditors and other investment holders. Based on these findings (ROA and ROE are high, but EAR
is low) it can be concluded that the sustainability of SOEs companies is not in doubt, but with 19.67% effective ownership,
the Indonesian government’s control of SOEs is in doubt. It makes more sense if creditors who control assets of 62.12% are
more able to control the company than Government equity, which is only 31.66%.
The results also show that SOEs Sustainability Report is significantly different from non-SOEs. Based on the T-test, it can
be seen that the average SOEs that made sustainability reports were 65% and 36% for non-SOEs. This finding does not
mean that what makes a sustainability report more secure is its sustainability, especially concerning ownership rights.
SOEs with high leverage demands higher transparency and disclosure than non-SOEs with lower leverage.

The limitation of this research, especially in the measurement of the Sustainability Report, is more assessed from
the financial aspect only. Besides that, another limitation is that in measuring the Sustainability Report it only uses
dummy variables, one if there is a report, and zero if there is no report. Future research can use a more comprehensive
measurement, which includes economic, environmental, and social aspects. This research also has not linked
performance with political connections. Subsequent research can use political connections as one of the variables to
measure the performance of SOEs because many have indicated that SOEs commissioners are appointed because they
have political connections with the authorities.

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