Dewi Nur Maulidiyah

Macroeconomic policy (fiscal and monetary) dynamics are interesting to analyze, especially considering corporate performance. This paper aims to determine the effect of macroeconomic policy on the company’s profit rate. Effectiveness of tax revenue (ETAX), realization of tax revenue (RTAX), Bank of Indonesian rate (BIRT), investment growth (INVG), realization of investments (RINV), infrastructure fund allocation rate (INFR), and realization of infrastructure funds (RINF) are macroeconomic policy variables. This study uses a sample of 256 companies listed on the Indonesia Stock Exchange (IDX) in 2005–2019. This paper employs such methods as GMM, using Wald-test and Sargan’s test. GMM estimator result shows that the instrument of infrastructure fund realization policy (RINF), investment growth (INVG), and investment realization (RINV) affect the company’s profit rate (PROF). Therefore, companies need to pay attention to the government development plans, investment growth, and investment realization, which can improve company performance. The result, government’s development for the 2005–2009 and 2015–2019 periods shows a significant difference in companies’ ability to generate profits.

Acknowledgments
We would like to thank the Department of Management, Faculty of Economics and Business, Universitas Islam Nahdlatul Ulama Jepara (Unisnu), and the Institute of Research and Community Services (LPPM) Unisnu Jepara Indonesia, which has supported this study.