The Influence of Earnings Volatility, Dividend Policy, and Asset Growth on Stock Price Volatility and Stock Returns in the Indonesian Banking Sector

Abstract

Purpose: This study aims to investigate the influence of dividend policy, earnings volatility, and asset growth on the stock prices and returns of banking companies listed on the Indonesia Stock Exchange (IDX). Research Method: This study employs an associative quantitative approach. Secondary data were obtained from the financial statements and annual reports of banking institutions for the years 2019 to 2020. Purposive sampling was used to select companies based on criteria regarding the issuance of financial statements and the distribution of dividends. Descriptive statistics, classical assumption tests, and hypothesis testing were conducted using multiple linear regression analysis via SPSS version 31. Results and Discussion: The results indicate that asset expansion, dividend strategy, and earnings fluctuations do not have a partial impact on stock prices or stock returns. Furthermore, these three variables do not influence stock price volatility (Sig. 0.848) or stock returns (Sig. 0.79). Implications: The findings suggest that external factors—including market sentiment and macroeconomic conditions—played a more significant role in influencing stock price fluctuations and investment returns for Indonesian banking companies during the study period. Originality: This study contributes to the literature by analyzing the impact of earnings volatility, dividend policy, and asset growth on stock price volatility and stock returns among banking companies on the Indonesia Stock Exchange during the 2021–2025 period. Keywords: Earnings Volatility, Dividend Policy, Asset Growth, Stock Price Volatility, Stock Return, Indonesian Banking