The role of e-government, human resource competency and good corporate governance on the financial performance of the government companies

Calen, C.; Theng, B.; Toni, N.

Abstract: Research on e-government and good governance is still rarely carried out, even though e-government and good governance are important factors in government companies. This research aims to analyze the relationship between e-government and financial performance, the relationship between employee competency variables on financial performance, and the relationship that good governance variables have on financial performance. The method of this research is quantitative through surveys, research data was obtained by distributing online questionnaires to 590 managers of government companies who were selected using a simple random sampling method, and an online questionnaire was designed using statements item with a Likert scale from 1 to 7. Data analysis used Structural Equation Modelling (SEM) with the SmartPLS 3.0 software tool to analyze research data. The stages of data analysis are validity testing, reliability testing, and significance testing of hypothesis testing. The results of this research show that e-government had a positive and significant effect on financial performance, and employee competence had a positive and significant effect on financial performance. Moreover, good governance had a positive and significant effect on financial performance. The novelty of this research is the creation of a new model of the relationship between e-government and financial performance, employee competence and financial performance, and good governance and financial performance which has not existed in previous studies. The practical implication of this research is that to improve the financial performance of government companies, we must implement e-government by increasing employee competency and implementing good governance.

How to cite this paper

 Calen, C., Theng, B & Toni, N. (2024). The role of e-government, human resource competency and good corporate governance on the financial performance of the government companies.International Journal of Data and Network Science, 8(3), 1873-1882.

References

Abdulazeez, D. A., Ndibe, L., & Mercy, A. M. (2016). Corporate governance and financial performance of listed deposit money banks in Nigeria. Journal of Accounting and Marketing, 5(1), 1-6.
Adnan, Z., Abdullah, H. S., & Ahmad, J. (2011). Direct influence of human resource management practices on financial performance in Malaysian R&D companies. World Review of Business Research, 1(1), 61-77.
Aggarwal, P. (2013). Impact of corporate governance on corporate financial performance. IOSR Journal of Business and Management, 13(3), 01-05.
Atmadja, A. T., Saputra, K. A. K., Tama, G. M., & Paranoan, S. (2021). Influence of human resources, financial attitudes, and coordination on cooperative financial management. The Journal of Asian Finance, Economics and Business, 8(2), 563-570.
Berthelot, S., Morris, T., & Morrill, C. (2010). Corporate governance rating and financial performance: a Canadian study. Corporate Governance: The international journal of business in society, 10(5), 635-646.
Bertot, J. C., Jaeger, P. T., & Grimes, J. M. (2010). Using ICTs to create a culture of transparency: E-government and so-cial media as openness and anti-corruption tools for societies. Government Information Quarterly, 27(3), 264-271.
Chen, Y. C. (2013). Improving transparency in the financial sector: E-government XBRL implementation in the United States. Public Performance & Management Review, 37(2), 241-262.
Fauzan, S., Prajanti, S. D. W., & Wahyudin, A. (2019). The Effect of Budgeting Quality and Human Resource Competency of School Financial Performance with Information Technology as a Moderating Variables. Journal of Economic Edu-cation, 8(2), 159-166.
Kusuma, I. L., Dewi, M. W., & Tho’in, M. (2021). Analysis of the effect of human resources competency, utilization of technological information, and internal control systems on the value of financial reporting information. Annals of the Romanian Society for Cell Biology, 14628-14638.
Lai, P. F., & Choi, O. N. (2014). Corporate governance and financial performance of bank in Asian regions and recom-mendations. Asian Journal of Finance and Accounting, 6(2), 377-406.
Leng, A. C. A. (2004). The impact of corporate governance practices on firms' financial performance: Evidence from Ma-laysian companies. ASEAN Economic Bulletin, 21(3), 308-318.
Leng, A. C. A., & Mansor, S. A. (2005). Can good corporate governance practices contribute to firms' financial perfor-mance?–evidence from Malaysian companies. International Journal of Business Governance and Ethics, 1(4), 350-362.
Makki, M. A. M., & Lodhi, S. A. (2013). Impact of corporate governance on financial performance. Pakistan Journal of Social Sciences, 33(2), 265-280.
Makki, M. A. M., & Lodhi, S. A. (2014). Impact of corporate governance on intellectual capital efficiency and financial performance. Pakistan Journal of Commerce and Social Sciences (PJCSS), 8(2), 305-330.
Mufti, O., Parvaiz, G. S., Wahab, M., & Durrani, M. (2016). Human Resource Competencies and Organizational Perfor-mance: A Study on Banking Sector Managers in Pakistan. Journal of Managerial Sciences, 10(1).
Mukhtaruddin, M., Ubaidillah, U., Dewi, K., Hakiki, A., & Nopriyanto, N. (2019). Good corporate governance, corporate social responsibility, firm value, and financial performance as moderating variable. Indonesian Journal of Sustainabil-ity Accounting and Management, 3(1), 55â-64.
Okoye, L. U., Olokoyo, F., Okoh, J. I., Ezeji, F., & Uzohue, R. (2020). Effect of corporate governance on the financial per-formance of commercial banks in Nigeria. Banks and Bank systems, 15(3), 55.
Otoo, F. N. K. (2019). Human resource management (HRM) practices and organizational performance: The mediating role of employee competencies. Employee Relations: The International Journal, 41(5), 949-970.
Pérez, C. C., Bolívar, M. P. R., & Hernández, A. M. L. (2008). e-Government process and incentives for online public fi-nancial information. Online Information Review, 32(3), 379.
Pina, V., Torres, L., & Royo, S. (2010). Is e‐government leading to more accountable and transparent local governments? An overall view. Financial accountability & management, 26(1), 3-20.
Ramasoyan, R., Sesa, P. V. S., Patma, K., & Larasati, R. (2021). Analysis Of Human Resource Competency, Internal Con-trol System, Quality Of Financial Statements and Application Of Government Accounting Standards To Accountabil-ity Of Performance Of Government Agencies In Pegunungan Bintang Regency. Journal of Social Science, 2(4), 429-443.
Reddy, K., Locke, S., & Scrimgeour, F. (2010). The efficacy of principle‐based corporate governance practices and firm financial performance: An empirical investigation. International Journal of Managerial Finance, 6(3), 190-219.
Rodriguez Bolivar, M. P., Caba Perez, C., & Lopez Hernandez, A. M. (2007). E-Government and public financial report-ing: the case of Spanish regional governments. The American review of public administration, 37(2), 142-177.
Rodriguez-Fernandez, M. (2016). Social responsibility and financial performance: The role of good corporate governance. BRQ Business Research Quarterly, 19(2), 137-151.
Rossi, M., Nerino, M., & Capasso, A. (2015). Corporate governance and financial performance of Italian listed firms. The results of empirical research. Corporate Ownership & Control, 12(2), 628-643.
Saidat, Z., Silva, M., & Seaman, C. (2019). The relationship between corporate governance and financial performance: Evidence from Jordanian family and nonfamily firms. Journal of Family Business Management, 9(1), 54-78.
Ueng, C. J. (2016). The analysis of corporate governance policy and corporate financial performance. Journal of Econom-ics and Finance, 40, 514-523.
Zubeltzu‐Jaka, E., Andicoechea‐Arondo, L., & Alvarez Etxeberria, I. (2018). Corporate social responsibility and corporate governance and corporate financial performance: Bridging concepts for a more ethical business model. Business Strat-egy & Development, 1(3), 214-222.