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External and Internal Factors Influence to the Return on Equity and Risk Investment in Jakarta Islamic Index (JII)

Author

Listed:
  • Diana Dwi Astuti

    (STIE Mandala, Jember, Indonesia)

Abstract

"Objective � This study aims to analyze the direct influence of external factors (inflation, foreign exchange rates, interest rate of Bank Indonesia) and internal (capital structure, liquidity) on Return On Equity (ROE) in companies that went public in Jakarta Islamic Index, analyze the indirect influence of external and internal factors on the risk of investing in companies that go public in Jakarta Islamic Index, analyze the effect of ROE on the risk investment in companies that go public in Jakarta Islamic Index. Methodology/Technique � The sample used 10 companies using purposive sampling. Analysis tools using path analysis. Findings � Results showed inflation and exchange rates (foreign exchange rates / USD) no significant effect on ROE and Investment Risk. BI rate has no effect on ROE but significant effect on the risk of investment. Capital structure and liquidity significantly influence the ROE but had no effect on the risk of investment. ROE has no effect on the risk of investment. Novelty � Results of research it pays advisable for investors and prospective investors pay attention to internal factors (capital structure, liquidity and other fundamental factors) companies due to internal factors will affect the profitability of Integration."

Suggested Citation

  • Diana Dwi Astuti, 2017. "External and Internal Factors Influence to the Return on Equity and Risk Investment in Jakarta Islamic Index (JII)," GATR Journals jmmr162, Global Academy of Training and Research (GATR) Enterprise.
    • Handle: RePEc:gtr:gatrjs:jmmr162
    as

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    References listed on IDEAS

    as
    1. Bitsch, Florian & Buchner, Axel & Kaserer, Christoph, 2010. "Risk, return and cash flow characteristics of infrastructure fund investments," EIB Papers 4/2010, European Investment Bank, Economics Department.
    2. Godfred A. Bokpin & Anthony Q.Q. Aboagye & Kofi A. Osei, 2010. "Risk exposure and corporate financial policy on the Ghana Stock Exchange," Journal of Risk Finance, Emerald Group Publishing, vol. 11(3), pages 323-332, May.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Inflation; Exchange Rates; Interest Rates; Capital Structure; Liquidity; ROE; Investment Risk.;
    All these keywords.

    JEL classification:

    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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