Title:
Effect of Operating Expense Intensity (OEI) and Raw Material Cost on Company Profit With Firm Size as a Moderating Variable (an Empirical Study on Food and Beverage Companies Listed on the Indonesia Stock Exchange)

Authors:
Rena Nur Fauziah, Siti Istikhoroh, Taudlikhul Afkar, Indonesia

Abstract:

This study examines the effect of operating expense intensity (OEI) and raw material cost on profitability, and the moderating role of firm size, in food and beverage companies listed on the Indonesia Stock Exchange during 2020 to 2025. Using a quantitative approach with secondary data and purposive sampling, 18 firms with 108 firm-year observations were analyzed through Partial Least Squares Structural Equation Modeling (PLS-SEM) with a two-stage moderation approach and 5,000 bootstrap subsamples. The results show that operating expense intensity and raw material cost significantly and negatively affect profitability, with raw material cost as the strongest predictor, explaining 39.6 percent of the profitability variance. Firm size does not weaken these effects; the interaction coefficients are significant but strengthen rather than weaken cost pressure, so the moderation hypotheses are rejected and firm size acts as a quasi moderator. The findings imply that cost-structure efficiency, particularly of raw materials, is decisive for profitability, and that scale alone does not protect earnings from cost pressure in a raw-material-intensive industry.

DOI: https://doi.org/10.51505/IJEBMR.2026.10916