Determinants of Affecting Investment Decision on Public Companies of Manufacturing Sector in Indonesia

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Gen Norman Thomas , Aryusmar, Lely Indriaty

Abstract

This research aims to examine the effect of pro forma index disclosure, market expectations, profitability, profit benchmarks, and company age on investment decisions. Data obtained from public companies of manufacturing sector listed on the Indonesia Stock Exchange (IDX) during 2015-2019. Panel data is processed from 50 companies or 250 observations using the E-Views application, and the resulting fixed effect regression equation is the best regression. The results in the study indicate that the pro forma index disclosure, profitability, and profit benchmarks have a significantly positive effect on investment decisions. However, pro forma index disclosure has the highest positive compared to profitability and profit benchmarks. Then, market expectations have the highest negative effect on investment decisions while company age does not affect investment decisions. Therefore, this study concludes that the disclosure of pro forma indexes, profitability, and benchmarks can improve the quality of investment decisions. However, the market expectation has the highest negative effect, and company age does not affect investment decisions. The results of this study have implications in providing additional references as determinants of affecting investment decision on public companies of manufacturing sector in Indonesia

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