Abstract
This study aims to provide empirical evidence of the effect of profitability, capital structure and forward looking information on investment risk. The population used in this research were all banking companies listed in the Indonesia Stock Exchange for the period 2016 to 2018. The sample selection used a random sampling method, and obtained 117 samples. The variables of profitability, capital structure, and forward-looking information refer to the elements of Integrated Reporting (2013) as an independent variable, and investment risk as the dependent variable. Data is collected from bank annual reports and share prices obtained from the website. The analysis method used is multiple linear regression. The results of the study concluded that profitability and capital structure had no effect on investment risk. Forward-looking disclosure has a negative effect on investment risk. This means that forward-looking disclosures can significantly reduce investment risk.
Highlights
Investment in the capital market sector is one of the driving forces for the economy in Indonesia
This study aims to examine whether profitability, capital structure and future disclosure of information affect investment risk
The study was conducted by taking financial statement data from 117 banking companies listed on the Indonesia Stock Exchange for the period 2016-2018
Summary
The banking sector can be considered by investors because the banking sector is one of the sectors on which the country’s economy is based. This is because the banking sector is an institution that provides payment mechanisms and instruments for the public. The banking sector gets a lot of sources of funds collected from the wider community. From this source of funds, banks process it and use it for business development through credit or loans given to the public. The banking sector is supervised by the OJK (Financial Services Authority) which is formed by the Government so that the funds that are managed for reporting will be transparent to the wider community, including investors
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