How does State Equity Participation Contribute to Performance of State-Owned Enterprises in Indonesia?

State-Owned Enterprises (SOEs) must be kept healthy by the government as one of the driving factors of the Indonesian economy. This capital injection into State-Owned Enterprises is officially referred to as State Equity Participation, or in Indonesian, Penyertaan Modal Negara (PMN). It is envisaged that increased equity involvement, if employed for investment, will boost the company's operational activities, hence improving the performance of SOEs. The purpose of this study is to determine the influence of state equity participation and business strategy on the implementation of good corporate governance principles and their effect on the performance of the company. The researcher's method is explanatory research. The sample for this study consisted of 35 enterprises owned by SOEs that received state equity participation in Indonesia between 2010 and 2019. Using the Structural Equation Model-Partial Least Squares approach, a sample size of at least 30 to 100 is recommended. The findings indicated that State Equity Participation had a substantial effect on the Good Corporate Governance variable, as did Business Strategy. However, whereas State Equity Participation has no substantial effect on the Company's Performance Variable, Business Strategy does. The implications of this research include a focus on the implementation of the company's business strategy, particularly the differentiation and focus strategies, by improving services to the community in accordance with consumer segmentation, controlling operating costs, and implementing the principles of Good Corporate Governance, which are not simply a matter of conformance.