Enhancing Competitive Business Strategies, Dividend Policy, and Investment Efficiency in Indonesian Manufacturing Firms
Mujennah, Yanuar Bachtiar, Nirza Marzuki Husein

Institute of Business and Technology Kalimantan (IBITEK)
Universitas Airlangga

Abstract

This research investigates the correlation among competitive business tactics, dividend policy, and investment efficiency within Indonesian manufacturing enterprises. It examines the influence of cost leadership and differentiation strategies on investment efficiency, as well as the moderating effect of dividend policy. In light of Indonesia dynamic economic and regulatory environment, comprehending these relationships is crucial for companies to enhance financial and strategic decision-making.
The study utilizes a quantitative methodology, including panel data regression analysis. Discrepancies between actual investments and planned investments are used to measure investment efficiency. Cost leadership and differentiation metrics are used to classify competitive tactics. The dividend policy is assessed by the dividend payout ratio. Differentiation techniques provide varied outcomes- companies with innovation improve investment efficiency, whereas excessive R&D expenditures result in inefficiencies. Dividend policy has a big effect on these links because higher dividends reduce agency problems, which makes investments more efficient. Moreover, companies exhibiting reduced debt and enhanced profitability display superior investment efficiency. The study weaknesses encompass its concentration on manufacturing enterprises, and omission of macroeconomic shocks. The results indicate that cost leadership enhances investment efficiency through the facilitation of optimal resource allocation. The results emphasize that strategy alignment and financial stability can improve investment efficiency, promoting long-term firm sustainability. This study enhances the literature and providing significant insights for managers and policymakers in emerging markets.

Keywords: Cost Leadership, Bussiness Strategy, Dividend Policy, Efficiency of Investment

Topic: Strategic management