Overview

Original Research

MODELING THE LONG-TERM SIMULTANEITY OF DIVIDEND POLICY AND STOCK RETURN OF INSURANCE COMPANIES IN INDONESIA

CIPTAWAN 1, SYAIFUDDIN 2, and NIKOUS SOTER SIHOMBING 3.

Vol 17, No 09 ( 2022 )   |  DOI: 10.5281/zenodo.7098787   |   Author Affiliation: Student of Study Program of Doctorate in Management, Postgraduate School, University of Prima Indonesia 1; Lecturer of Study Program of Doctorate in Management, Postgraduate School, University of Prima Indonesia 2; Lecturer of Postgraduate Study Program, Institute of Business Informatics & Business Technology 3.   |   Licensing: CC 4.0   |   Pg no: 1041-1057   |   To cite: CIPTAWAN, et al., (2022). MODELING THE LONG-TERM SIMULTANEITY OF DIVIDEND POLICY AND STOCK RETURN OF INSURANCE COMPANIES IN INDONESIA. 17(09), 1041–1057. https://doi.org/10.5281/zenodo.7098787   |   Published on: 19-09-2022

Abstract

The purpose of this study is to determine whether the Current Ratio, Stock Price, Return on Assets, and Debt to Equity Ratio have a significant effect simultaneously on Dividend Policy. And to determine whether return on Assets, Debt to Equity Ratio, Return on Equity, and PER have a significant effect simultaneously on Stock Return. And by panel to find out whether Current Ratio, Stock Price, Return On Assets, Debt to Equity Ratio, Return On Equity, and PER have a positive partial and simultaneous effect on Stock Return. The present study is an associative/quantitative research. This study was conducted in insurance companies listed on the Indonesia Stock Exchange in the period 2012 – 2021. The method used in this research is Two-stage-least-square (2SLS), which is a special tool in instrumental variables regression. In the Panel method, panel regression is used to obtain the estimation results of each individual characteristic separately. The results in this study are equation I: R2 = 0.601129 which means that the variables CR, HG, ROA, DER, and RSHM are able to explain KDIV by 60.1% and the remaining 39.9% is influenced by other variables outside the estimates in the model. And for equation II the result of the simultaneous method is 2 = 0.433269 which means that the variables ROA, DER, ROE, PER, and KDIV are able to explain RSHM by 43.3% and the remaining 36.7% is influenced by other variables outside the estimation in the model. The leading indicators of Stock Return in insurance companies in Indonesia include PT. Asuransi Bina Darta, Tbk (ABDA), PT. Asuransi Harta Aman Pratama, Tbk (AHAP), PT. Asuransi Multi Arta Guna, (AMAG), PT. Asuransi Bintang, Tbk (ASBI), PT. Asuransi Jasa Tania, Tbk (ASJT), PT. Asuransi Ramayana, Tbk (ASRM), PT. Asuransi Dayin Mitra, Tbk (ASDM), PT. Lippo G Insurance, Tbk (LPGI), PT. Maskapai RI, Tbk (MREI), PT. Panin Insurance, Tbk (PNIN) and PT. Panin Life, Tbk (PNLF). Thus, on a panel basis, it turns out that all variables are able to become leading indicators in influencing stock returns in insurance companies in Indonesia in both short and long runs.

Keywords

dividend policy, stock return, insurance company