Market Reaction to the Boycott of Israeli-Affiliated Issuers in Indonesia: An Event Study Approach

Farhan Aryo Abimanyu; Umi Widyastuti; Agung Dharmawan Buchdadi

doi:10.59890/ijfbm.v4i1.171

Authors

Farhan Aryo Abimanyu Universitas Negeri Jakarta
Umi Widyastuti Universitas Negeri Jakarta
Agung Dharmawan Buchdadi Universitas Negeri Jakarta

DOI:

https://doi.org/10.59890/ijfbm.v4i1.171

Keywords:

Boycott, Financial Market, Stock Prices, Israeli-Affiliated Issuers

Abstract

This study explores the reaction of the Indonesian capital market to the boycott of Israeli-affiliated issuers, triggered by the issuance of Fatwa MUI No. 83 of 2023. By applying the event study methodology, this research measures the impact of the boycott on stock prices, with a focus on abnormal returns (AR), cumulative abnormal returns (CAR), and average abnormal returns (AAR) for selected companies listed on the Indonesia Stock Exchange (IDX). The findings reveal no significant differences in AR, CAR, and AAR before and after the fatwa announcement, suggesting that the market did not perceive the event as a significant factor influencing stock price movements. This study enhances the understanding of how market participants respond to social and political events that impact company affiliations, especially in the case of boycotts.

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