The Role of Financial Performance in Mediating the Effect of Economic Performance on Stock Performance in Consumer Goods Sector Companies on the Indonesia Stock Exchange 2022–2024

Abstract

This research was conducted due to inconsistent results from empirical studies and a theoretical gap regarding the relationship between economic performance and stock performance. In primary consumer goods companies during 2022–2024, changes in economic performance were not consistently followed by changes in stock performance, suggesting the need for a mediating variable, financial performance. This research based on efficient market theory and signaling theory. Efficient market theory explains stock prices reflect all available information, while signaling theory highlights the role of financial information in conveying company prospects to investors. A quantitative approach with panel data was used, involving 54 companies selected through purposive sampling, resulting 162 observations. Financial performance is measured by ROA, economic performance by GDP, and stock performance by stock returns. The analysis employs PLS-SEM using SmartPLS4. The results show that economic performance has a positive but insignificant effect on financial performance, economic performance has a positive and significant effect on stock performance, financial performance has a positive and significant effect on stock performance, and financial performance does not mediate the relationship between economic performance and stock performance. Therefore, companies should prioritize improving financial performance, and future research is recommended to include moderating variables and longer observation periods.