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

Diana Dwi Astuti ()
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Diana Dwi Astuti: STIE Mandala, Jember, Indonesia

GATR Journals from Global Academy of Training and Research (GATR) Enterprise

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."

Keywords: Inflation; Exchange Rates; Interest Rates; Capital Structure; Liquidity; ROE; Investment Risk. (search for similar items in EconPapers)
JEL-codes: L16 M21 M41 (search for similar items in EconPapers)
Pages: 8
Date: 2017-06-23
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Published in Journal of Management and Marketing Review, Volume 2, Issue 3

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