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The Impact of Consumer Confidence, Trading Volume, and Exchange Rates on Stock Prices in Indonesia: Mediating Effects of ESG Risk Ratings and Inflation

Author

Listed:
  • Chien-Hsin Wu

    (Tamkang University)

  • Jovaniel Wedsley Kawatu

    (Tamkang University)

  • Chia-Hui Yu

    (National Taipei University of Business)

  • Wen-Hung Huang

    (National Taiwan University)

  • Yu-Hsiang Huang

    (Tamkang University)

Abstract

This study examines the complex interplay between macroeconomic factors, ESG (Environmental, Social, and Governance) risk ratings, and stock price performance within the Indonesian stock market. We conducted an empirical analysis of 77 Indonesian companies listed on both the Indonesia Stock Exchange (IDX) and CSRHub from 2019 to 2023. We used a panel regression model to assess the direct effects of key variables and employed Sobel, Aroian, and Goodman tests to evaluate potential mediating effects. The findings reveal that while ESG risk ratings significantly influence stock prices, consumer confidence index, stock trading volume, exchange rates, and inflation do not exert a direct impact. Although these macroeconomic factors do influence inflation and ESG risk ratings, the study concludes that neither of these variables mediates the relationship between consumer confidence, trading volume, exchange rates, and stock prices. These findings offer valuable insights for investors and policymakers, highlighting the growing importance of ESG considerations in investment decisions and long-term value creation in the Indonesian emerging market.

Suggested Citation

  • Chien-Hsin Wu & Jovaniel Wedsley Kawatu & Chia-Hui Yu & Wen-Hung Huang & Yu-Hsiang Huang, 2026. "The Impact of Consumer Confidence, Trading Volume, and Exchange Rates on Stock Prices in Indonesia: Mediating Effects of ESG Risk Ratings and Inflation," Springer Proceedings in Business and Economics,, Springer.
    • Handle: RePEc:spr:prbchp:978-3-032-23124-6_9
    DOI: 10.1007/978-3-032-23124-6_9
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