The Effect of Financial Flexibility and Company-Level Market Competitiveness on ESG Performance in Indonesia

Dzikra, Ammar Muhammad (2026) The Effect of Financial Flexibility and Company-Level Market Competitiveness on ESG Performance in Indonesia. S1 thesis, Universitas Andalas.

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Abstract

This study seeks to empirically test and examine whether there is an influence of financial flexibility, consisting of cash flexibility and debt flexibility, and company-level market competitiveness on ESG performance in companies in the non-financial sector. The research was conducted using a quantitative approach using panel data regression analysis and purposive sampling techniques, involving 943 companies in the non-financial sector listed on the Indonesia Stock Exchange (IDX) as the population, with the research period starting from 2020 to 2024. The results showed that the debt flexibility variable had a significant positive effect on ESG performance in non-financial sector companies, while the cash flexibility and company-level market competitiveness variables did not have a significant effect on ESG performance in non-financial sector companies. These findings imply that companies with large external financing capacities tend to improve and invest more in sustainability. These findings indicate that the level of complexity and competitive position of companies in the market has not made ESG a key strategy in market competition. This research help enhance the understanding of the impact of cash flexibility, debt, and company-level market competitiveness on ESG performance in companies in the non-financial sector

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