The Importance of Investment Efficiency in Manufacturing Companies

Oct 13, 2025 by talynt.org 65 views

The Influence of Foreign Ownership, Debt Maturity, Tangibility, Company Size, and Audit Committee on Investment Efficiency in Manufacturing Companies in the Consumer Goods Sector Listed on the IDX in 2019-2022

Introduction

The consumer goods sector is one of the most dynamic and competitive sectors in the Indonesian economy, with a significant impact on the country's GDP. The sector is dominated by manufacturing companies that produce a wide range of products, from food and beverages to household goods and personal care products. In recent years, the sector has experienced rapid growth, driven by increasing demand from domestic and international markets. However, the sector also faces significant challenges, including high competition, changing consumer preferences, and increasing regulatory requirements.

The Importance of Investment Efficiency in Manufacturing Companies

Investment efficiency is a critical factor in the success of manufacturing companies in the consumer goods sector. It refers to the ability of a company to generate returns on its investments, while minimizing costs and maximizing value creation. Investment efficiency is influenced by a range of factors, including foreign ownership, debt maturity, tangibility, company size, and audit committee. In this study, we examine the impact of these factors on investment efficiency in manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2019-2022.

Research Methodology

This study uses a causal research design, which aims to understand the cause-and-effect relationship between independent variables and the dependent variable. The independent variables studied are foreign ownership, debt maturity, tangibility, company size, and audit committee, while the dependent variable is investment efficiency. The study uses a purposive sampling technique to select 19 companies from a population of 54 companies in the consumer goods sector. The sample provides a total of 72 units of analysis.

Research Results

The results of the study show that simultaneously, foreign ownership, debt maturity, tangibility, company size, and audit committee have a significant influence on investment efficiency. However, when viewed partially, only foreign ownership and tangibility have a positive and significant influence on investment efficiency. Meanwhile, debt maturity, company size, and audit committee do not show a significant effect on investment efficiency.

Additional Analysis and Explanation

Foreign ownership in these companies turned out to contribute positively to investment efficiency. This can be explained because foreign investors often bring broader experience, networks, and market access, which can improve company investment performance. On the other hand, tangibility, which reflects the proportion of fixed assets in total assets, also has a positive impact. Companies with high fixed assets tend to have more guarantees to get financing, which in turn supports the efficiency of investment use.

Conversely, debt maturity variables, company size, and audit committees do not show significant effects. Debt maturity may not be relevant in the context of investment efficiency because companies can have flexibility in the management of short and long-term debt. The size of the company, although it is often associated with the capacity to invest, does not guarantee better investment efficiency, because management factors and investment strategies also play an important role. The Audit Committee, although it functions to maintain the integrity of financial statements, does not directly affect investment efficiency.

Conclusion

This study provides valuable insights on the factors that affect investment efficiency in manufacturing companies in the consumer goods sector listed on the IDX. The discovery of a significant influence of foreign ownership and tangibility shows that companies must pay attention to these aspects in their investment strategies. In addition, this finding also indicates that not all variables considered to contribute directly to investment efficiency, so it is important for management to conduct deeper analysis in investment decision making. This research can be a reference for stakeholders, including investors and policy makers, in formulating strategies that can increase investment efficiency in this sector.

Implications of the Study

The findings of this study have several implications for stakeholders in the consumer goods sector. Firstly, companies must pay attention to foreign ownership and tangibility in their investment strategies. This can be achieved by attracting foreign investors who can bring broader experience, networks, and market access. Companies must also focus on increasing their fixed assets, which can provide more guarantees to get financing and support the efficiency of investment use.

Secondly, the study highlights the importance of management factors and investment strategies in determining investment efficiency. Companies must focus on developing effective management systems and strategies that can optimize investment returns while minimizing costs.

Thirdly, the study suggests that not all variables considered to contribute directly to investment efficiency. Companies must conduct deeper analysis in investment decision making to ensure that they are making informed decisions that can maximize investment returns.

Limitations of the Study

This study has several limitations that must be acknowledged. Firstly, the study uses a purposive sampling technique, which may not be representative of the entire population of companies in the consumer goods sector. Secondly, the study only examines the impact of foreign ownership, debt maturity, tangibility, company size, and audit committee on investment efficiency, and does not consider other factors that may influence investment efficiency.

Future Research Directions

This study provides several avenues for future research. Firstly, future studies can examine the impact of other factors on investment efficiency, such as corporate governance, risk management, and innovation. Secondly, future studies can investigate the relationship between investment efficiency and other performance metrics, such as return on equity (ROE) and return on assets (ROA).

Conclusion

In conclusion, this study provides valuable insights on the factors that affect investment efficiency in manufacturing companies in the consumer goods sector listed on the IDX. The discovery of a significant influence of foreign ownership and tangibility shows that companies must pay attention to these aspects in their investment strategies. In addition, this finding also indicates that not all variables considered to contribute directly to investment efficiency, so it is important for management to conduct deeper analysis in investment decision making. This research can be a reference for stakeholders, including investors and policy makers, in formulating strategies that can increase investment efficiency in this sector.
Q&A: The Influence of Foreign Ownership, Debt Maturity, Tangibility, Company Size, and Audit Committee on Investment Efficiency in Manufacturing Companies in the Consumer Goods Sector

Q: What is the main focus of this study?

A: The main focus of this study is to examine the influence of foreign ownership, debt maturity, tangibility, company size, and audit committee on investment efficiency in manufacturing companies in the consumer goods sector listed on the Indonesia Stock Exchange (IDX) in 2019-2022.

Q: What are the independent variables studied in this research?

A: The independent variables studied in this research are foreign ownership, debt maturity, tangibility, company size, and audit committee.

Q: What is the dependent variable in this study?

A: The dependent variable in this study is investment efficiency.

Q: What are the research findings of this study?

A: The research findings of this study show that simultaneously, foreign ownership, debt maturity, tangibility, company size, and audit committee have a significant influence on investment efficiency. However, when viewed partially, only foreign ownership and tangibility have a positive and significant influence on investment efficiency. Meanwhile, debt maturity, company size, and audit committee do not show a significant effect on investment efficiency.

Q: What are the implications of this study for companies in the consumer goods sector?

A: The implications of this study for companies in the consumer goods sector are that they must pay attention to foreign ownership and tangibility in their investment strategies. This can be achieved by attracting foreign investors who can bring broader experience, networks, and market access. Companies must also focus on increasing their fixed assets, which can provide more guarantees to get financing and support the efficiency of investment use.

Q: What are the limitations of this study?

A: The limitations of this study are that it uses a purposive sampling technique, which may not be representative of the entire population of companies in the consumer goods sector. Additionally, the study only examines the impact of foreign ownership, debt maturity, tangibility, company size, and audit committee on investment efficiency, and does not consider other factors that may influence investment efficiency.

Q: What are the future research directions suggested by this study?

A: The future research directions suggested by this study are that future studies can examine the impact of other factors on investment efficiency, such as corporate governance, risk management, and innovation. Additionally, future studies can investigate the relationship between investment efficiency and other performance metrics, such as return on equity (ROE) and return on assets (ROA).

Q: What are the practical implications of this study for investors and policymakers?

A: The practical implications of this study for investors and policymakers are that they should consider the influence of foreign ownership, debt maturity, tangibility, company size, and audit committee on investment efficiency when making investment decisions or formulating policies for the consumer goods sector.

Q: What are the contributions of this study to the existing literature on investment efficiency?

A: The contributions of this study to the existing literature on investment efficiency are that it provides new insights into the factors that influence investment efficiency in manufacturing companies in the consumer goods sector. Additionally, the study highlights the importance of foreign ownership and tangibility in determining investment efficiency.

Q: What are the future research directions suggested by this study for academics and researchers?

A: The future research directions suggested by this study for academics and researchers are that they should investigate the impact of other factors on investment efficiency, such as corporate governance, risk management, and innovation. Additionally, future studies can investigate the relationship between investment efficiency and other performance metrics, such as return on equity (ROE) and return on assets (ROA).