• ISSN: 2010-023X (Print)
    • Abbreviated Title: Int. J. Trade, Economics and Financ.
    • Frequency: Bimonthly
    • DOI: 10.18178/IJTEF
    • Editor-in-Chief: Prof.Tung-Zong (Donald) Chang
    • Executive Editor: Ms. Cherry L. Chen
    • Abstracting/ Indexing:  ProQuest, Crossref, Electronic Journals Library , EBSCO, and Ulrich's Periodicals Directory
    • E-mail: ijtef@ejournal.net
IJTEF 2019 Vol.10(3): 67-72 ISSN: 2010-023X
DOI: 10.18178/ijtef.2019.10.3.640

Company Size Growth, Stock Liquidity and Return of Stock: Role of Mispricing

Tigor Sitorus, Ibnu Wijaya Pangkato, Chairul Muriman Setyabudi, and Rahmadsyah Lubis
Abstract—The main objective of this study is to provide information and knowledge for prospective investors before deciding to buy shares, and also to develope the relationship inter variable between the company size growth and stock liquidity with return of stock, also to examine the stock’s return that is influenced by the company size growth and stock liquidity, mediated by mispricing variable, in the companies listed on the Indonesia Stock Exchange. Sampling method used is purposive sampling. The samples in this study were companies registered in LQ45 Index from January 2013 to December 2017. This study used structural equation modeling with 24 companies listed in LQ45 Index consecutively for 5 years as samples. The results of this study indicate that during January 2013 until December 2017 stock’s return was influenced positively and significantly by company size growth and mispricing, and mispricing itself is positively influenced by company size growth. However, stock liquidity does not significantly affect toward the stock’s return and mispricing. Therefore, investors must develop an information network with external parties in order to obtain information and knowledge about changes in the business environment of prospective issuer.

Index Terms—Return, mispricing, size, stock, liquidity.

Tigor Sitorus, Chairul Muriman Setyabudi, and Rahmadsyah Lubis are with the Indonesia Police Science College, Indonesia (e-mail: sitorus_tigor@yahoo.com, Cak_iir@yahoo.co.id, lubisptik@yahoo.com). Ibnu Wijaya Pangkato is with Universitas Bunda Mulia, Indonesia (e-mail: ibnuwp@hotmail.com).

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Cite: Tigor Sitorus, Ibnu Wijaya Pangkato, Chairul Muriman Setyabudi, and Rahmadsyah Lubis, "Company Size Growth, Stock Liquidity and Return of Stock: Role of Mispricing," International Journal of Trade, Economics and Finance vol.10, no.3, pp. 67-72, 2019.

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