Dividend Policy, Profitability and ERP Implementation as Determinants of Stock Price Volatility: Evidence from Indonesia

Abstract

Aims: This study examines the effect of Dividend Payout Ratio (DPR), Enterprise Resource Planning (ERP) implementation, and profitability measured by Return on Assets (ROA) on stock price volatility in companies listed on the Indonesia Stock Exchange (IDX). Study Design: A quantitative approach with panel data regression is applied to firms observed during 2022–2024. Place and Duration of Study: Sample: The study was conducted on IDX-listed companies across all sectors during the 2022–2024 observation period. Methodology: the sample consists of firms with available secondary data on ERP, ROA, DPR, and stock volatility. Data analysis was performed using descriptive statistics, classical assumption tests, and panel regression with E-views 12. Results: The findings show that higher DPR is associated with lower stock volatility, supporting the dividend signaling theory that dividends convey stability and positive prospects to investors. ERP implementation has no significant effect, yet its role in enhancing transparency and operational efficiency highlights potential contributions to market efficiency. ROA also shows no significant impact, suggesting that profitability is not a primary driver of volatility. Conclusion: Dividend policy emerges as the most relevant factor in reducing volatility, while ERP provides a non-financial perspective on risk through improved disclosure. These insights benefit both managers in strategy formulation and investors in assessing risk-return trade-offs.