Strategic company sustainability: optimize firm resource management through innovation efficiency

Abstract

This study intends to investigate the effect of a company's corporate governance aspects, measured by the size of the board of directors, on sustainable growth and the role of innovation efficiency as a moderating variable. The samples were taken from manufacturing companies listed on the Indonesia Stock Exchange (IDX) for the 2017-2021 period using purposive sampling. There were 44 companies that met the criteria. The technical analysis used is Partial Least Square (PLS-SEM) with WarpPLS 8.0 software, which is reliable for processing small samples. Stochastic frontier analysis (SFA) analysis through Frontier 4.1 is used for the measurement of innovation efficiency. The results of this study show that corporate governance has positive and significant effects on sustainable growth. Furthermore, innovation efficiency is a moderating factor that can strengthen the influence of corporate governance on sustainable growth. The novel of this study provides evidence relating to the importance of management in human resources and management in innovation to increase the company's productivity through innovation efficiency, which has an important role in increasing the company's sustainable growth.