Integrating Enterprise Risk Management And Business Strategy To Enhance Firm Performance: The Mediating Role Of Competitive Advantage In Indonesia’s Manufacturing Sector
Abstract
This study investigates the impact of Enterprise Risk Management (ERM) and business strategy—specifically cost leadership—on firm performance, with a particular focus on the mediating role of competitive advantage. The research sample comprises 60 manufacturing firms listed on the Indonesia Stock Exchange (IDX) from 2019 to 2023. ERM disclosures were measured using content analysis of annual reports, while financial and strategic data were collected from firm financial statements published on the IDX website and the Refinitiv Eikon. A panel regression method was employed to analyze the data using STATA software, testing both direct and indirect relationships among the variables. The empirical results indicate that ERM does not have a significant effect on firm performance, whether measured by Return on Assets (ROA) or Tobin’s Q, either directly or through competitive advantage. In contrast, the cost leadership strategy shows a significant positive influence on financial performance. Furthermore, competitive advantage is found to partially mediate the relationship between cost leadership and firm performance.
Downloads
Copyright (c) 2025 Gabriela Arum Handayani, Maria Ulpah
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
An author who publishes in the EKOMBIS REVIEW: Jurnal Ilmiah Ekonomi dan Bisnis agrees to the following terms:
Author retains the copyright and grants the journal the right of first publication of the work simultaneously licensed under the Creative Commons Attribution-ShareAlike 4.0 License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal
Submission of a manuscript implies that the submitted work has not been published before (except as part of a thesis or report, or abstract); that it is not under consideration for publication elsewhere; that its publication has been approved by all co-authors. If and when the manuscript is accepted for publication, the author(s) still hold the copyright and retain publishing rights without restrictions. For the new invention, authors are suggested to manage its patent before published. The license type is CC-BY-SA 4.0.
EKOMBIS REVIEW: Jurnal Ilmiah Ekonomi dan Bisnis is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
