Title:
Inflation, Consumer Purchasing Behavior, and Market Power: Explaining Corporate Profitability in Indonesia's Food Industry

Authors:
Sarah Pebrilia, Muhammad Faisal Akbar*, Zikri Rahmani, Indonesia

Abstract:

This study examines how competitive position and aggregate purchasing conditions are associated with corporate profit in Indonesia’s food industry during 2020–2024. A balanced panel of 12 listed companies provides 60 firm-year observations, combining financial statements with national Consumer Price Index (CPI) and GDP per capita data. Pooled, fixed-effects, and random-effects specifications are considered, with random effects retained as the reported baseline. Market share and log GDP per capita are positively associated with profit, whereas the CPI coefficient is negative and statistically insignificant. These estimates are consistent with a role for competitive position and aggregate demand conditions, but do not identify causal effects or demonstrate that market power cushions inflationary shocks. CPI measures the price level rather than the inflation rate, and market share does not directly measure pricing power. Moreover, the macroeconomic coefficients depend on only five annual observations repeated across firms. The study therefore provides conditional, exploratory evidence on corporate profit rather than a structural test of consumer behavior or firm resilience.

DOI: https://doi.org/10.51505/IJEBMR.2026.11101