"THE IMPACT OF COST LEADERSHIP ON FINANCIAL DISTRESS MEDIATED ENVIRONME" by Steven Asher, Meythi Meythi et al.
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Abstract

This study investigates the mediating role of environmental, social, and governance (ESG) performance in the relationship between cost leadership and financial distress among companies in Indonesia. Using path analysis, the research analyzed a sample of 43 firms listed on the Indonesia Stock Exchange from 2018 to 2022. The findings indicate that cost leadership positively affected ESG; however, no direct relationship was observed between cost leadership or ESG and financial distress. The mediation analysis reveals that ESG acted as a mediator, linking cost leadership to a reduced risk of financial distress. These results highlight the importance of integrating cost leadership with ESG practices to strengthen corporate financial resilience. The study has offered valuable insights for companies and stakeholders looking to improve sustainability practices that could mitigate the risk of financial distress.

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