INFLUENCE OF ECONOMIC FACTORS ON THE SHARE’S VALUE THROUGH THE CONCEPTS OF THE LIFE CYCLE: THE CASE OF INDONESIA

Abstract

The article aimed to substantiate the differentiated impact of critical internal factors of the economic activities on the market value of shares for joint-stock companies accounting for the organizational development cycle. Using the Company’s Financial Statements in the Automotive and Component subsectors listed on the Indonesia Stock Exchange for 2008-2021, the Chow test, path analysis, and t-criterion, we determined the features of the relationship between the share price and the economic performance indicators of joint-stock companies are determined. We used path analysis for modeling to assess the relationship between the price of shares and the number of dividend payments per share, asset turnover, and net profit per share built. A differentiated nature of the relationship between the indicators depending on the accounting company’s life cycle has been established. Knowing the stage of the business, the company can develop the most effective dividend strategy and determine the appropriate management method.