Determinants of Investment Opportunity Set (Degree of Internationalization and Macroeconomic Variables)

Cynthia Utama; Meiti Sulistika

Cynthia Utama University of Indonesia
Meiti Sulistika Mandiri Investasi

Keywords: Investment, Macroeconomic, Internationalization

Abstract

The aim of this study is to investigate the influence of internal factors (i.e. the degree of internationalization, profitability, firm size, and financial leverage) and external factors (i.e. GNP growth and the inflation rate) on firms’ growth opportunities or their Investment Opportunity Set (IOS). The IOS is measured by the market-to-book assets ratio. The result shows that profitability and firms’ size have a positive impact on the IOS whereas the degree of internationalization and financial leverage has a negative influence on the IOS. Finally, the IOS is positively affected by GNP growth while the inflation rate has a negative impact on IOS.

Author Biographies

Cynthia Utama, University of Indonesia

UTAMA, Cynthia A. earned her Master of Science (1999) and Ph. D (2006) from Graduate School of Management, Faculty of Economics University of Indonesia (FEUI); and Bachelor of Management (1996) from Extension Program of Faculty of Economics University of Indonesia (FEUI). She was a Head of Management Research Centre at Graduate School of Management FEUI from 2008 until 2009. Currently, she is a research fellow at FEUI and member of Academic Senate, University of Indonesia. She serves as a member of audit committee of a listed company in Indonesia Stock Exchange as well. She is also a lecturer at Bachelor Degree as well as Master Degree at FEUI. Her area of interest includes investment in capital market, corporate finance, and corporate governance. She has authored a number of articles and papers and has presented her research works in international as well as national conference/seminars.
Author’s contact detail: Research Fellow and Academic Senator, Faculty of Economics and Business, University of Indonesia, Kampus UI Depok, Jl. Prod. Dr. Sumitro Djojohadikusomo, UI Depok 16424; Phone: +62217272525, +62217272646; Fax: +62217270024; e-mail: cynthiautama@gmail.com, cynthiautama@yahoo.com, cynthia.afriani@ui.ac.id).

Meiti Sulistika, Mandiri Investasi

SULISTIKA, Meiti earned her Bachelor in Economics from Faculty of Economic and Business on 2010. She worked at Finance Division of PT. Telekomunikasi Tbk on 2009. Currently, she has been working at Mandiri Investasi as Investment analyst from 2012. She also received Master Program Awardee, LPDP Scholarship on 2014. This fellowship will fully fund her postgraduate study at MFin in International Finance program, University of Glasgow and her study will be started on September 2015.
Author’s contact detail: meiti_sulistika@yahoo.com

References

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