Keywords
financial performance
growth opportunity
stock return volatility
path analysis
How to Cite
Abstract
The energy crisis in Indonesia has led to fluctuations in energy sector stock prices, creating uncertainty for investors. This study aims to analyze the effect of corporate board size and financial performance on stock return volatility, with growth opportunity as an intervening variable. The research employs a quantitative method using path analysis and secondary data from 14 energy sector companies listed on the Indonesia Stock Exchange during the 2018–2022 period. The results show that board size has no direct effect on stock return volatility but has an indirect effect through growth opportunity. Financial performance positively influences stock return volatility. Overall, growth opportunity is proven to partially mediate the relationship between board size and financial performance on stock return volatility.
References
Abubakar, U.Y. (2020) “EFFECTS OF EXCHANGE RATE VOLATILITY ON FINANCIAL PERFORMANCE OF DEPOSIT MONEY BANKS IN NIGERIA,” Edo Journal of Arts, Management and Social Sciences, 2(1), pp. 121–139. Available at: https://erepository.uonbi.ac.ke/handle/11295/97499.
Adams, R.B. and Ferreira, D. (2009) “Women in the boardroom and their impact on governance and performance,” Journal of Financial Economics, 94(2), pp. 291–309. Available at: https://doi.org/https://doi.org/10.1016/j.jfineco.2008.10.007.
Ai, H. and Kiku, D. (2015) “Volatility Risks and Growth Options,” Management Science, 62(3), pp. 741–763. Available at: https://doi.org/10.1287/mnsc.2014.2129.
Anand, S. (2008) Essentials of Corporate Governance. Hoboken: John Wiley & Sons, Inc. Available at: https://www.slideshare.net/PranveerShekhawat/challenges-and-issues-in-corporate-governance.
Andres, P. de and Vallelado, E. (2008) “Corporate governance in banking: The role of the board of directors,” Journal of Banking & Finance, 32(12), pp. 2570–2580. Available at: https://doi.org/10.1016/j.jbankfin.2008.05.008.
Djazuli, A. (2017) “The Relevance of Leverage, Profitability, Market Performance, and Macroeconomic to Stock Price,” EKOBIS – Ekonomi Bisnis, 22(2), pp. 112–122. Available at: http://download.garuda.kemdikbud.go.id/article.php?article=615211&val=9804&title=THE RELEVANCE OF LEVERAGE PROFITABILITY MARKET PERFORMANCE AND MACROECONOMIC TO STOCK PRICE.
Doku, J.N. et al. (2023) “Impact of corporate board size and board independence on stock returns volatility in Ghana,” Cogent Business & Management, 10(2), p. 2204597. Available at: https://doi.org/10.1080/23311975.2023.2204597.
Ebrahim, Z., Inderwildi, O.R. and King, D.A. (2014) “Macroeconomic impacts of oil price volatility: mitigation and resilience,” Frontiers in Energy, 8(1), pp. 9–24. Available at: https://doi.org/10.1007/s11708-014-0303-0.
Ghozali, I. (2018) Aplikasi Analisis Multivariate dengan Program IBM SPSS 25. 9th ed. Semarang: Badan Penerbit Universitas Diponegoro.
Glancey, K. (1998) “Determinants of growth and profitability in small entrepreneurial firms ,” International Journal of Entrepreneurial Behavior & Research, 4(1), pp. 18–27. Available at: https://doi.org/10.1108/13552559810203948.
Gujarati, D.N. (2004) Basic Econometrics. 4th ed. New Delhi: Tata McGraw-Hill.
Haryanto, S. et al. (2022) “Growth Opportunity and Firm Value in Indonesian Manufacturing Firms,” AFRE (Accounting and Financial Review), 5(3), pp. 250–259. Available at: https://jurnal.unmer.ac.id/index.php/afr/article/view/8936.
Hayes, A.F. (2012) “PROCESS: A Versatile Computational Tool for Observed Variable Mediation, Moderation, and Conditional Process Modeling.” Available at: https://is.muni.cz/el/1423/podzim2014/PSY704/50497615/hayes_2012_navod_process.pdf.
Hayes, A.F. (2022) Introduction to Mediation, Moderation, and Conditional Process Analysis: A Regression-Based Approach. 3rd ed. New York: Guilford Press.
Jensen, M.C. and Meckling, W.H. (1976) “Theory of the firm: Managerial behavior, agency costs and ownership structure,” Journal of Financial Economics, 3(4), pp. 305–360. Available at: https://doi.org/10.1016/0304-405X(76)90026-X.
Kasmir (2018) Analisis Laporan Keuangan. Depok: PT. RajaGrafindo Persada.
Luthfi, V.M. et al. (2022) “Financial Performance and Stock Prices: Evidence from Firms Listed on the Jakarta Islamic Index,” Indonesian Journal of Economics and Management, 3(1), pp. 33–42. Available at: https://jurnal.polban.ac.id/ijem/article/view/4644.
Merz, A. and Trabert, S. (2020) Board Size, Firm Type, and Stock Return Volatility. Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3549906.
Mogos, S., Davis, A. and Baptista, R. (2021) “High and sustainable growth: persistence, volatility, and survival of high growth firms,” Eurasian Business Review, 11(1), pp. 135–161. Available at: https://doi.org/10.1007/s40821-020-00161-x.
PT Bursa Efek Indonesia (2024a) Home, Bursa Efek Indonesia. Available at: https://idx.co.id/id (Accessed: July 1, 2024).
PT Bursa Efek Indonesia (2024b) Laporan Keuangan dan Tahunan, Bursa Efek Indonesia. Available at: https://www.idx.co.id/id/perusahaan-tercatat/laporan-keuangan-dan-tahunan (Accessed: January 1, 2025).
Simoens, M. and Vennet, R. Vander (2021) “Bank performance in Europe and the US: A divergence in market-to-book ratios,” Finance Research Letters, 40, p. 101672. Available at: https://doi.org/10.1016/j.frl.2020.101672.
SPENCE, M. (1978) “18 - JOB MARKET SIGNALING **The essay is based on the author’s doctoral dissertation (‘Market Signalling: The Informational Structure of Job Markets and Related Phenomena,’ Ph.D. thesis, Harvard University, 1972), forthcoming as a book entitled Market Signaling: Information Transfer in Hinng and Related Screening Processes in the Harvard Economic Studies Series, Harvard University Press. The aim here is to present the outline of the signaling model and some of its conclusions. Generalizations of the numerical examples used for expositional purposes here are found in ibid, and elsewhere.,” in P. DIAMOND and M.B.T.-U. in E. ROTHSCHILD (eds.). Academic Press, pp. 281–306. Available at: https://doi.org/https://doi.org/10.1016/B978-0-12-214850-7.50025-5.
Sugiyono (2019) Metode Penelitian Pendidikan (Kuantitatif, Kualitatif, Kombinasi, R&D dan Penelitian Tindakan). 3rd ed. Edited by A. Nuryanto. Bandung: Alfabeta.
Tan, Y. and Floros, C. (2012) “Stock market volatility and bank performance in China,” Studies in Economics and Finance, 29(3), pp. 211–228. Available at: https://doi.org/10.1108/10867371211246885.
Wahyudi, S.T. and Rahmawati, A. (2025) “Examining the link between world oil price volatility and sectoral stock performance in Indonesia,” Cogent Economics & Finance, 13(1), p. 2535484. Available at: https://doi.org/10.1080/23322039.2025.2535484.
Yang, S. and Fu, Y. (2025) “Interconnectedness among supply chain disruptions, energy crisis, and oil market volatility on economic resilience,” Energy Economics, 143, p. 108290. Available at: https://doi.org/10.1016/j.eneco.2025.108290.
Yarram, S.R. and Dollery, B. (2015) “Corporate governance and financial policies: Influence of board characteristics on the dividend policy of Australian firms,” Managerial Finance, 41(3), pp. 267–285. Available at: https://doi.org/10.1108/MF-03-2014-0086.
Yermack, D. (1996) “Higher market valuation of companies with a small board of directors,” Journal of Financial Economics, 40(2), pp. 185–211. Available at: https://doi.org/https://doi.org/10.1016/0304-405X(95)00844-5.
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.
Copyright (c) 2025 Viki Yuni Astuti, Ratih Kusumawardhani, Alfiatul Maulida