Firm Performance Factors and Efficiency of Indonesian Palm Oil Companies

Abstract

The palm oil industry is one of the agricultural, industrial sectors with a strategic role in the national economy, especially in Indonesia. Although this industry has a high contribution in Indonesia, the oil palm plantation companies have not shown satisfactory performance. Internal firm conditions and macroeconomic variables may influence the performance of oil palm plantation companies. Therefore, this study aims to investigate the firm performance determinants and efficiency of oil palm companies in Indonesia. The samples in this research are 12 oil palm companies listed on the Indonesian Stock Exchange (BEI) for the 2014-2019 periods. The panel regression analysis and the Preference Ranking Organization Method for Enrichment Evaluation (PROMETHEE) are applied in this study. The first result in the panel regression shows that the firm size, exchange rate, and world CPO price affect ROA as the operational performance. Moreover, liquidity, leverage, and inflation do not affect ROA as operational performance. The second result in panel regression shows that inflation, exchange rate, and CPO World Price affect PER as the market performance. However, market performance is not affected by liquidity, leverage, and firm size. The efficiency analysis shows that the firm ranking tends to fluctuate in the observation period. This analysis defines that the oil palm plantation companies in Indonesia, on average, have a similar performance.

The Impact of Sustainable Certification on Financial and Market Performance: Evidence from Indonesian Palm Oil Companies

“…The limitation of this study is exploration the RSPO certification on firm performance based on financial and market performance. It is because the other firm performance measurement such as operational performance has been carried out in other studies [29].…”

“…Previous research states that the liquidity variable can affect firm performance [27,28]. Moreover, another research has also found that liquidity affects palm oil companies' performance from an operational and market perspective from Price to Earning Ratio (PER) indicator [29]. • Capital Structure.…”

Triple Bottom Line in Indonesia Commercial Palm Oil Mill Business: Analytical Network Process Approach

“…Moreover, the sustainability issues especially in environmental aspects came from operational process in plantation [53]. Overall, this model is more efficient as an operational cost in oil palm plantation are eliminated and implicated in firm performance [4]. Therefore, the Commercial CPO mill can improve the quality of smallholder because this depends on the productivity of smallholders assisting in oil palm plantations.…”

“…Indonesia palm oil business has grown rapidly and took over the first ranked as the biggest global producer since 2004 [1,2], and has been reported very competitive both in firm level and also on a country level [3,4]. The development of palm oil business can be used as an effort by governments to generate foreign exchange, enlarge job creation, and improve farmers welfare [5,6].…”

Efek sertifikasi RSPO dan determinan lainnya terhadap kinerja keuangan perusahaan perkebunan kelapa sawit di Indonesia

“…Terkait dengan biaya adopsi RSPO, studi kasus Salman et al (2017) Rosyadi et al, 2020). Namun beberapa studi empiris menunjukkan bahwa kepemilikan sertifikat RSPO tidak berpengaruh terhadap kinerja finansial perusahaan dan tidak mempengaruhi performa pasar Suroso et al, 2021) Suroso et al (2020). Sehubungan dengan perdebatan hubungan antara sertifikasi lingkungan dengan kinerja perusahaan, studi ini akan memperkaya dan mengisi kesenjangan literatur pengaruh sertifikasi RSPO terhadap kinerja perusahaan perkebunan kelapa sawit untuk kasus Indonesia.…”