THE EFFECTS OF THE WORLD CPO PRICES, MACROECOMONY, AND CAPITAL STRUCTURES ON THE PROFITABILITY OF PALM OIL COMPANIES

Abstract

The background of this study is the phenomenon known as the diminishing of the world CPO prices, analysing other external factors such as Indonesia’s macroeconomy, interest rate, exchange rate towards dollars, inflation rate and capital structure of the palm oil subsector. It implements the Panel Data Regression analysis with the Fixed Effect Model to determine the external and internal factors of ROE in the palm oil subsector. The estimated doubled linear regression would result on the positive significance of the world CPO prices towards the ROE, the negative signifiance of the inflation rate towards the ROE, the positive significance of Growth towards the ROE, and the negative significance of Size towards the ROE.

Keywords

• World CPO price
• macroeconomics
• capital structure
• oil palm
• return on equity
• return on assets