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Selective Mediation in Corporate Governance: Why Formal Governance Channels the Influence of Structural Factors but Not Political Factors on the Performance of Regional-Owned Enterprises (ROEs)

Author


Winny Septiana Sari(1Mail), Eko Kuntadhi(2),
(1) Universitas Bhayangkara Jakarta Raya,
(2) Universitas Bhayangkara Jakarta Raya,

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Available online: 2026-11-03  |  Published : 2026-11-03
Copyright (c) 2026 Winny Septiana Sari, Eko Kuntadhi
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Abstract


Regional-Owned Enterprises (ROEs) in Indonesia are expected to be commercially viable while simultaneously providing essential public services, despite operating under the direct political influence of local governments as their shareholders. This study examines whether corporate governance mediates the effects of political behavior, strategic planning, human resources, and regulation on organizational performance in a regional-owned drinking water and investment enterprise in South Tangerang City, Indonesia. A cross-sectional survey of employees and management yielded 122 complete responses, which were analyzed using partial least squares structural equation modeling (PLS-SEM) with 5,000 bootstrap resamples. All four antecedents and corporate governance exhibited direct relationships with organizational performance, with corporate governance demonstrating the strongest path coefficient (β = 0.405). Corporate governance partially mediated the effects of strategic planning, human resources, and regulation, but did not mediate the effect of political behavior, whose path to corporate governance was statistically insignificant. We interpret this selective mediation through the concept of institutional decoupling: formal governance absorbs and channels structural inputs, whereas political influence affects organizational performance through informal channels that are not captured by formal governance mechanisms.

Keywords


Regional-Owned Enterprises, Corporate Governance, Political Behavior, Institutional Decoupling, Organizational Performance, PLS-SEM

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[VERIFY: tambahkan 3–5 studi empiris tata kelola BUMD/BUMN Indonesia yang dapat diverifikasi, serta sumber peringkat TOP BUMD 2025. Periksa setiap DOI sebelum submit.]


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