The Role of Foreign Investors in Commercial Bank Stock Prices: Macroeconomic Factors & Internal Factors of the Company Moderated Net Foreign Investor Funds
DOI:
https://doi.org/10.38035/dijemss.v7i2.5522Keywords:
Net Foreign Investor Funds, Bank Stock Prices, Macroeconomic Factors, Internal Factors, Regression Data PanelAbstract
This study aims to analyze the influence of macroeconomic factors and internal factors of the company on the share price of commercial banks in Indonesia, with the role of net foreign investor funds as a moderation variable. The macroeconomic variables studied include economic growth (G), inflation (INF), and exchange rate (Exchange Rate), while the company's internal variables include net interest margin (NIM), debt to equity ratio (DER), and loan to deposit ratio (LDR). This study uses quarterly time series data from 2018 quarter I to 2024 quarter IV with a research sample of 14 commercial banks consisting of 4 banks in the KBMI category 4 and 10 banks in the KBMI category 3 and uses panel data regression analysis with an interaction approach to test the effect of moderation of net foreign investor funds on the relationship between independent variables and stock prices. The findings of the study show that macroeconomic factors such as economic growth (G), inflation (INF), and the Rupiah exchange rate (KURS) as well as internal factors such as net interest margin (NIM) have a significant effect on the share price of commercial banks. Meanwhile, net foreign investor funds (NF) were proven not to moderate the relationship between macroeconomic factors and internal company factors to bank share prices. These findings suggest that the direct influence of foreign investors on the dynamics of bank stock prices may not be as strong as the independent variables of macroeconomic factors and internal factors of the company, so the direction of stock movements is more influenced by fundamental and macroeconomic conditions than net foreign investment funds.
References
Aayale, J., Seffar, M., & Koutene, J. (2022). Financial Indicators, Stock Prices and Returns: Evidence from Banks Listed on the Stock Exchange of an Emerging Market (CSE). International Journal of Accounting, Finance, Auditing, Management and Economics, 3(2–2), 533–551.
Adegbe, J. U., & Kummer, A. (2025). Exchange rate volatility and foreign portfolio investment in emerging and developing economies. World Journal of Advanced Research and Reviews, 25(2), 2408–2424.
Agustina, R., Sadikin, M., & Ferdinata, M. H. (2025). The Effects of IHSG, Trading Volume, and Foreign Transactions on the Volatility of Blue-Chip Stocks in the Mining Sector. Proceeding International Conference on Accounting and Finance, 694–718.
Blessing, H., & Sakouvogui, G. (2023). Impact of liquidity and solvency ratios on financial performance: a comprehensive analysis. Indonesia Auditing Research Journal, 12(3), 102–115.
Chikwira, C., & Mohammed, J. I. (2023). The impact of the stock market on liquidity and economic growth: Evidence of volatile market. Economies, 11(6), 155.
Gaies, B., & Nabi, M. (2021). Banking crises and economic growth in developing countries: Why privileging foreign direct investment over external debt? Bulletin of Economic Research, 73(4), 736–761.
Gavish, L. R., Qadan, M., & Yagil, J. (2021). Net buyers of attention-grabbing stocks? Who exactly are they? Journal of Behavioral Finance, 22(1), 26–45.
Ha, N. P. (2021). Impact of macroeconomic factors and interaction with institutional performance on Vietnamese bank share prices. Banks and Bank Systems, 16(1), 127–137.
Ischak, S. A., Maarif, M. S., Hermadi, I., & Asikin, Z. (2024). Efficiency and Competitiveness of Banking in Indonesia Based on Bank Core Capital Group. Economies, 12(12).
Musora, T. (2023). Application of Panel Data Analysis and Modelling to Economic Data: A Case of Determinants of Economic Growth for SADC and Zimbabwe. Chinhoyi University of Technology.
Oyadeyi, O. O., Osinubi, T. T., Simatele, M., & Oyadeyi, O. A. (2025). The threshold effects of inflation rate, interest rate, and exchange rate on economic growth in Nigeria. Cogent Economics & Finance, 13(1), 2460066.
Panagopoulos, A., & Tzionas, I. (2023). The Use Of Sustainable Financial Instruments In Relation To The Social Impact Investment: Esg Policies, Capital Markets’ Approach And Investors’ Protection: An Innovative Perspective For A Global Surveillance Authority. International Journal of Business Administration.
Pratiwik, E., & Prajanti, S. D. W. (2023). Rupiah exchange rate: The determinants and impact of shocks on the economy. Jurnal Ekonomi & Studi Pembangunan, 24(1), 100–126.
Ramzan, M. (2021). Symmetric impact of exchange rate volatility on foreign direct investment in Pakistan: do the global financial crises and political regimes matter? Annals of Financial Economics, 16(04), 2250007.
Rashid, A., Jehan, Z., & Kanval, N. (2023). External shocks, stock market volatility, and macroeconomic performance: An empirical evidence from Pakistan. Journal of Economic Cooperation & Development, 44(2), 1–26.
Riyanti, R. S. (2021). Consequences of Bank Governance, Competition and Financial Crisis for Small Business Lending: Evidence from Indonesia. University of Leicester.
Rumbun, D. (2023). Analyzing Stock Price Dynamics in the Indonesian Banking Sector: A Study of Technical and Fundamental Factors on the IDX. Indonesia Accounting Research Journal, 11(2), 97–110.
Sek, S. K., Sim, K. Y., & Mukherjee, D. (2024). Panel ardl and nardl models: role of agriculture in economic growth in selected asian countries. In Applied econometric analysis using cross section and panel data (pp. 471–503). Springer.
Shafaq. (2023). Role of Capital Markets in Financial System. Issue 1 Indian JL & Legal Rsch., 5, 1.
Soedarmono, W., Gunadi, I., Indawan, F., & Wulandari, C. S. (2022). The Dynamics Of Foreign Capital Flows In Indonesia: Sources And Implications On Bond Market And Bank Stability.
Syauki, A., Anggraeni, E., & Iqbal, M. (2024). Dynamics of Fundamental Factors and Macroeconomics in Determining The Stock Prices of Islamic Banks in Indonesia. Al-Amwal: Jurnal Ekonomi Dan Perbankan Syari’ah, 16(2), 125–140.
Wibowo, A. H., & Kunawangsih, T. (2025). THE HERDING PHENOMENON IN THE INDONESIAN STOCK MARKET: AN ANALYSIS OF CSSD & CSAD AND ITS IMPLICATIONS FOR INVESTORS AND REGULATORS. Journal Research of Social Science, Economics & Management, 4(9).
Youssef, A. H., Mohamed, E. S., & Latif, S. H. A. (2023). Handling multi-collinearity using principal component analysis with the panel data model. EUREKA: Physics and Engineering, 1, 177–188.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Putra Chandra Wijaya
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors who publish their manuscripts in this journal agree to the following conditions:
- The copyright on each article belongs to the author(s).
- The author acknowledges that the Dinasti International Journal of Education Management and Social Science (DIJEMSS) has the right to be the first to publish with a Creative Commons Attribution 4.0 International license (Attribution 4.0 International (CC BY 4.0).
- Authors can submit articles separately, arrange for the non-exclusive distribution of manuscripts that have been published in this journal into other versions (e.g., sent to the author's institutional repository, publication into books, etc.), by acknowledging that the manuscript has been published for the first time in the Dinasti International Journal of Education Management and Social Science (DIJEMSS).
