The effect of government regulations through competitiveness on the the performance of textile companies

Abstract

This study examines the role of government regulation on competitiveness and its impact on the performance of companies that have been designated as bonded zones. Bonded zone regulations provide several conveniences such as: delaying the payment of taxes on imported goods, accelerating customs duties, and exempting import permits are expected to improve company performance. Until 2019, 493 textile companies had been designated as bonded zones in Indonesia. But in reality, there are still companies designated as bonded zones that have low financial performance. This research uses 204 textile companies designated as bonded zones in Indonesia. The data were obtained from questionnaires filled out by company representatives. Data were analysed using a statistical test tool. This study finds that government regulations have a greater influence on the performance of textile companies mediated by power competition. The government must make regulations that can support increased competitiveness to improve company performance.