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The Impact of Government Support on the Performance of Indonesia’s State-Owned Enterprises

Publication | July 2019
The Impact of Government Support on the Performance of Indonesia’s State-Owned Enterprises

Government support for state-owned enterprises does not have a significant effect on their financial performance.

We analyze the impact of government support on the financial performance of Indonesia’s state-owned enterprises (SOEs). We employ the ordinary least square (OLS) method with firm and year fixed effects in addition to clustered standard errors. The findings show that government support for SOEs does not have a significant effect on their financial performance. We find that the government should examine its investment policy to support SOEs and consider designing a proper government support policy to generate higher SOE financial performance.

WORKING PAPER NO: 983