The impact of purchasing and inventory performance on sustainable financial performance with fiscal term as a moderating factor (A case study from oil and gas industry in Indonesia)

Abstract

This research delves into the correlation between purchasing performance and inventory performance, particularly in the context of their influence on sustainable financial performance within the upstream oil and gas sector in Indonesia. The study collected data spanning a five-year period from 2018 to 2022, involving 25 Production Sharing Contract Contractors (PSCC) during the initial Plan of Development (POD) phase. To analyze the data, the study employed Structural Equation Modeling (SEM) using WarpPLS. The results indicate that purchasing performance has a significant impact on sustainable financial performance, whereas inventory performance does not exhibit a notable influence. Moreover, the role of the fiscal term as a moderator in the relationship between purchasing performance and inventory performance concerning sustainable financial performance is found to be significant. This research introduces a comprehensive framework that enhances our understanding of the effects of purchasing and inventory performance, taking into account the moderating role of the fiscal term, on sustainable financial performance, offering a novel contribution to this field of study.

Keywords

• Purchasing performance
• Inventory performance
• Upstream oil and gas industry
• Complexity