Is the effect of a political event more pronounced for government controlled firms?
This study investigates market reaction to a political event, which is the presidential election of Republic of Indonesia in 2014 by studying 387 publicly traded firms in the Indonesia Stock Exchange. It employs event study method to measure the information content of this event. By going deeper, th...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Pusat Penelitian dan Pengabdian Masyarakat Sekolah Tinggi Ilmu Ekonomi (PPPM STIE)
2016-11-01
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| Series: | Journal of Economics, Business & Accountancy |
| Subjects: | |
| Online Access: | https://journal.perbanas.ac.id/index.php/jebav/article/view/629 |
| _version_ | 1811318746351927296 |
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| author | Irwan Trinugroho Aurio Fajrin Sutaryo Sutaryo |
| author_facet | Irwan Trinugroho Aurio Fajrin Sutaryo Sutaryo |
| author_sort | Irwan Trinugroho |
| collection | DOAJ |
| description | This study investigates market reaction to a political event, which is the presidential election of Republic of Indonesia in 2014 by studying 387 publicly traded firms in the Indonesia Stock Exchange. It employs event study method to measure the information content of this event. By going deeper, this study looked at the effect difference between government controlled firms (partially privatized firms) and private firms. The results show that there was a significant abnormal return around the event date. The negative abnormal return one day before the election date, which was followed by rebounding one day after the event, indicate that investors consider that the election had been done well particularly with respect to the political stability and security. Moreover, this paper reveals that the effect of presidential election is more pronounced for government-controlled firms than private firms. Government controlled firms may be more susceptible to political event. |
| first_indexed | 2024-04-13T12:30:55Z |
| format | Article |
| id | doaj.art-c22c7f9ec509470f9b472da5f44b3d6f |
| institution | Directory Open Access Journal |
| issn | 2087-3735 2088-785X |
| language | English |
| last_indexed | 2024-04-13T12:30:55Z |
| publishDate | 2016-11-01 |
| publisher | Pusat Penelitian dan Pengabdian Masyarakat Sekolah Tinggi Ilmu Ekonomi (PPPM STIE) |
| record_format | Article |
| series | Journal of Economics, Business & Accountancy |
| spelling | doaj.art-c22c7f9ec509470f9b472da5f44b3d6f2022-12-22T02:46:50ZengPusat Penelitian dan Pengabdian Masyarakat Sekolah Tinggi Ilmu Ekonomi (PPPM STIE)Journal of Economics, Business & Accountancy2087-37352088-785X2016-11-0119217318010.14414/jebav.v19i2.629459Is the effect of a political event more pronounced for government controlled firms?Irwan Trinugroho0Aurio Fajrin1Sutaryo Sutaryo2Universitas Sebelas MaretUniversitas Sebelas MaretUniversitas Sebelas MaretThis study investigates market reaction to a political event, which is the presidential election of Republic of Indonesia in 2014 by studying 387 publicly traded firms in the Indonesia Stock Exchange. It employs event study method to measure the information content of this event. By going deeper, this study looked at the effect difference between government controlled firms (partially privatized firms) and private firms. The results show that there was a significant abnormal return around the event date. The negative abnormal return one day before the election date, which was followed by rebounding one day after the event, indicate that investors consider that the election had been done well particularly with respect to the political stability and security. Moreover, this paper reveals that the effect of presidential election is more pronounced for government-controlled firms than private firms. Government controlled firms may be more susceptible to political event.https://journal.perbanas.ac.id/index.php/jebav/article/view/629market reactionevent studypolitical eventgovernment-controlled firmsabnormal return |
| spellingShingle | Irwan Trinugroho Aurio Fajrin Sutaryo Sutaryo Is the effect of a political event more pronounced for government controlled firms? Journal of Economics, Business & Accountancy market reaction event study political event government-controlled firms abnormal return |
| title | Is the effect of a political event more pronounced for government controlled firms? |
| title_full | Is the effect of a political event more pronounced for government controlled firms? |
| title_fullStr | Is the effect of a political event more pronounced for government controlled firms? |
| title_full_unstemmed | Is the effect of a political event more pronounced for government controlled firms? |
| title_short | Is the effect of a political event more pronounced for government controlled firms? |
| title_sort | is the effect of a political event more pronounced for government controlled firms |
| topic | market reaction event study political event government-controlled firms abnormal return |
| url | https://journal.perbanas.ac.id/index.php/jebav/article/view/629 |
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