Digital Transformation, Sales Growth, and Intellectual Capital as Determinants of Financial Performance: The Moderating Role of Good Corporate Governance in Indonesian Retail Firms

Abstract

Financial performance in Indonesia’s retail sector has remained volatile amid post-pandemic changes in consumption, competitive pressure, and accelerated digital adoption. This study examines the effects of digital transformation, sales growth, and intellectual capital on financial performance, while testing the moderating role of good corporate governance (GCG). Using a quantitative explanatory design, the study analyzes panel data from 27 retail firms listed on the Indonesia Stock Exchange over 2020-2024, yielding 135 firm-year observations. Data were obtained from audited financial statements and annual reports and were analyzed using panel-data moderated regression analysis in EViews 13. The random-effects model shows that digital transformation, sales growth, and intellectual capital have positive and significant effects on return on assets. GCG, proxied by the proportion of independent commissioners, has no direct significant effect on financial performance. GCG also does not significantly moderate the digital transformation-financial performance relationship. However, it significantly strengthens the positive effect of sales growth and significantly weakens the positive effect of intellectual capital. These findings indicate that retail firms should combine effective digital investment, sales expansion, and knowledge-based resources with governance practices that are substantive rather than merely formal.