EXAMINING THE LINK BETWEEN DIGITAL MATURITY, PROFITABILITY, SALES GROWTH, AND STOCK RETURNS IN INDONESIAN FAST MOVING CONSUMER GOODS (FMCG) INDUSRTY

• Main Author: Rafi An-Nabil Yuswadi, Muhammad
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/82945
• Institution: Institut Teknologi Bandung

This research investigates the impact of digital transformation on corporate stock return, analyzing the influence of digital maturity on stock returns within the Indonesian FastMoving Consumer Goods (FMCG) industry. The study is prompted by the increasing relevance of digital technologies in enhancing business processes and outcomes. Digital transformation, encompassing technologies such as Artificial Intelligence, Internet of Things (IoT), and data analytics, significantly affects financial performance and market perception. The research uses a quantitative approach, employing textual quantification methods to assess digital activity disclosed in annual reports. The sample consists of FMCG companies listed on the Indonesia Stock Exchange, covering 2019 to 2023 from the Kompas100 index. Key variables include measures of digital maturity, financial performance indicators like profitability and sales growth, and stock return data. Findings reveal a negative and insignificant correlation between digital maturity and stock returns, indicating that companies with higher digital maturity do not achieve better stock performance. This relationship is mediated by non-significant changes in financial performance metrics, suggesting that digital transformation does not necessarily enhance operational efficiency and market competitiveness. Additionally, the study highlights the varying impact of different digital technologies, with data analytics and process automation showing less significant effects. The implications of this research are multifaceted, offering valuable insights for corporate managers, investors, and policymakers. Managers are urged to reconsider investments in digital technologies to ensure they boost financial performance and shareholder value effectively. Investors can leverage digital maturity assessments cautiously in their decision-making, while policymakers might foster a more supportive environment for digital innovation.