The Influence of Government Capital Expenditure, Financial Performance, and Good Corporate Governance on Stock Returns (A Study of State-Owned Construction Enterprises Listed on the Indonesia Stock Exchange in the 2015–2024 Period)

Abstract

The infrastructure and construction sector plays a strategic role in Indonesia's economic growth. However, increased government capital spending is not always reflected in higher stock returns for state-owned construction companies listed on the Indonesia Stock Exchange. This study aims to analyze the effects of government capital spending realization, financial performance, and good corporate governance on stock returns for state-owned construction companies listed on the Indonesia Stock Exchange during 2015–2024. This study uses a quantitative approach with secondary panel data, purposive sampling, and panel data regression analysis. The results show that all independent variables simultaneously have a significant effect on stock returns. Partially, Debt to Equity Ratio and Earnings Per Share have a positive and significant effect, while government capital spending realization has a negative and significant effect. Meanwhile, Return on Assets, Current Ratio, Total Asset Turnover, and good corporate governance do not have a significant effect. These findings indicate that the market is more responsive to earnings per share and funding structure than to the amount of government fiscal support. Consequently, companies need to strengthen earnings quality and capital structure, while the government needs to ensure that capital spending translates into operational performance that is appreciated by the market.