Financial Performance Divergence between State-Owned and Private Construction Firms: Evidence from Indonesia, 2020–2024

DOI

10.2991/978-94-6239-811-5_45How to use a DOI?

Keywords

agency theory; construction sector; financial performance; private firms; state-owned enterprises

Abstract

This study examines financial performance differences between state-owned (BUMN Karya) and private construction companies listed on the Indonesia Stock Exchange during 2020–2024, a period encompassing the COVID-19 pandemic and its aftermath. Using a non-parametric comparative framework applied to 60 firm-year observations across twelve financial ratios, the study evaluates differences in liquidity, solvency, profitability, and asset efficiency. The results indicate that BUMN Karya firms exhibit substantially higher leverage, weaker liquidity, lower profitability, and lower asset efficiency than their private counterparts. These differences are not attributable solely to common pandemic conditions, as both ownership groups experienced similar directions of change during the crisis. However, BUMN Karya firms entered the post-pandemic period with structurally weaker financial conditions and demonstrated slower recovery in several performance dimensions. The findings are consistent with agency theory, suggesting that implicit government guarantees, political mandates, and weaker market discipline may contribute to persistent financial performance disparities. The study concludes that the performance gap is structural rather than cyclical, highlighting the need for restructuring measures that address financing burdens, public-service mandates, and governance mechanisms. These findings provide empirical implications for strengthening the financial sustainability, accountability, and governance of BUMN Karya in Indonesia and enhancing long-term competitiveness in infrastructure development.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Fathahillah Haji Wisesa Nusantara
AU  - Soegiharto Soegihart
PY  - 2026
DA  - 2026/10/29
TI  - Financial Performance Divergence between State-Owned and Private Construction Firms: Evidence from Indonesia, 2020–2024
BT  - Proceedings of the International Conference on Business, Economic, and Social Sustainability (ICOBES 2026)
PB  - Atlantis Press
SP  - 573
EP  - 588
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-811-5_45
DO  - 10.2991/978-94-6239-811-5_45
ID  - Nusantara2026
ER  -