A recent study from the Faculty of Economics and Business, Semarang State University (FEB UNNES) has identified key factors that can stabilize or destabilize stock prices in the Indonesian capital market. Conducted by a team of lecturers and students, the research reveals that corporate debt structure and the role of institutional investors significantly influence the resilience of the national financial market.
The study, titled “Debt Maturity Structure and the Risk of Stock Price Decline: The Role of Institutional Ownership,” analyzed data from non-financial companies listed on the Indonesia Stock Exchange during the 2019–2023 period. Using panel data regression analysis, the team, led by Kris Brantas Abiprayu, M.Sc., and Erisa Aprilia Wicaksari, M.M., found that a high proportion of long-term debt has the potential to increase the risk of stock price declines. This is due to the weakening of the creditor oversight function within the financing structure.
However, optimistic findings also emerged: the presence of institutional investorssuch as pension funds, insurance companies, and mutual funds appears to mitigate these risks. Share ownership by these institutions has been shown to increase transparency and accountability in company management, thus creating a stabilizing effect amid market volatility.
The results of this study have important practical implications for various stakeholders. For company managers, the findings underscore the importance of maintaining a balanced debt structure and providing transparent information disclosure. For investors, this research offers guidance on incorporating institutional ownership factors into portfolio decisions. For regulators, this study can serve as a reference in developing more responsive market supervision policies
More than just an academic contribution, this research provides a concrete intellectual foundation for achieving the Sustainable Development Goals (SDGs). The findings regarding the role of institutional investors in enhancing transparency and accountability directly strengthen good corporate governance. This is a crucial foundation for SDG 16: Achieving an inclusive and equitable society through strong and accountable institutions. A capital market managed with principles of transparency and fairness is a vital institutional infrastructure for a country’s economic stability.
Furthermore, maintaining financial market stability is an absolute prerequisite for SDG 8: Inclusive and sustainable economic growth and full and productive employment. This research demonstrates how to prevent stock market crashes that can trigger financial crises and widespread layoffs. Stable capital markets attract investment, fund business expansion, and ultimately create new jobs. Furthermore, by identifying how sound financing structures can support firm resilience, this research also contributes to SDG 9: Building resilient infrastructure, promoting inclusive and sustainable industrialization, and supporting innovation. Companies with strong financial foundations are better able to invest in technology, research, and development, which are the drivers of long-term innovation and productivity.
