Macroeconomic Determinants of Stock Market Fluctuations: The Case of Indonesia

Abstract

The study was aimed at assessing the macroeconomic determinants of stock market fluctuations in Indonesia. The quantitative data was collected through secondary sources such as World Bank. The data was collected from 1990 to 2019. The statistical testing was done through Descriptive statistics, Unit root testing and ARDL (Autoregressive Distributed Lag) model. The data was of mixed nature as it consisted of stationary and unit root. The findings revealed that the overall model was significant and in long run, there is a significant impact of macroeconomic indicators on stock prices in Indonesian market. Geographical limitation is the major issues that have restricted the collection and analysis of data. This study can also be improved by doing country comparison and industry comparison of same industries.