Kesumah, Fajrin Satria Dwi and Nairobi, Nairobi and Usman, Mustofa and Russel, Edwin (2020) Application of path analysis of the effect of macroeconomic conditions to the share prices of PT AKR Corporindo Tbk. TEST Engineering and Management, 82 (1). pp. 6815-6828. ISSN 0193 - 4120

Application of path analysis of the effect of macroeconomic conditions to the share prices.pdf

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Prior to known as path analysis, causal modelling has been widely utilised by many researchers in many different areas, such as education, social science, transportation, and economics. This study aims to hypothesize whether the existence of direct and indirect effects of INFL to INTR; INFL and INTR to EXCR; EXCR and INTR to GDP; and INTR and GDP to SP is available based on the constructed models. The application of path analysis in this study is used to measure the causal modelling between share prices of AKRA (SP) and its macroeconomic factors affecting it directly and/or indirectly. The proxy of macroeconomics in this study are inflation rate (INFL), exchange rate (EXCR), interest rate (INTR), and Gross Domestic Product (GDP). The findings suggest that all four estimated models either have only a direct effect or have both direct and indirect effects. Furthermore, the static analysis determines that not all effects satisfying both significant and meaningfulness criteria, which some are only meaningfulness but they need to remain on the models. The decomposition of correlation among variables is also constructed and the computation shows that some have a strong correlation and others have a slightly weak correlation. The model can be a measurement for taking a call or a put for the investors’ decision holding AKRA shares.

Item Type: Article
Subjects: Q Science > QA Mathematics
Divisions: Fakultas Matematika dan Ilmu Pengetahuan Alam (FMIPA) > Prodi Matematika
Depositing User: WAMILIANA
Date Deposited: 28 May 2020 11:48
Last Modified: 28 May 2020 11:48

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