Dividend Policy in the Managerial Ownership-Leverage-Performance Nexus: Evidence from Indonesian Consumer Goods Firms

Abstract

Consumer goods manufacturers must sustain operations and profitability amid post-pandemic macroeconomic uncertainty. Prior studies report inconsistent effects of managerial ownership and leverage on financial performance, while the mediating role of dividend policy remains underexamined, particularly in Indonesia's consumer goods sector. This study examines the effects of managerial ownership and leverage on financial performance and tests dividend policy as a mediator. The framework integrates Agency Theory, Pecking Order Theory, and Signaling Theory. The population comprised 97 consumer goods manufacturing companies listed on the Indonesia Stock Exchange (IDX) during 2020-2024. Purposive sampling yielded 95 firm-year observations from 19 companies. Secondary data were obtained from audited annual reports and official IDX publications and analyzed using IBM SPSS Statistics 25. Managerial ownership and leverage had significant positive effects on dividend policy. Managerial ownership had a significant positive effect on financial performance, whereas leverage had a significant negative effect. Dividend policy did not significantly affect financial performance. Sobel tests further indicated that dividend policy did not mediate either the managerial ownership-financial performance relationship or the leverage-financial performance relationship. The findings suggest that corporate governance alignment and capital-structure decisions influence financial performance more directly than dividend distribution does in this sample.