‘The Effect of Announcement As the Host of XVIII Asian Games on the Indonesian Stock Market’

Andreas, Tatang Ary Gumanti, Uliya Nurjannah and Intan Nurul Awwaliyah. The effect of announcement as the host of XVIII Asian Games on the Indonesian stock market. Investment Management and Financial Innovations, 17(1), 109-118, 2020

DOI: 10.21511/imfi.17(1).2020.10

11 Pages Posted: 1 Apr 2020

See all articles by Andreas

Andreas

Universitas Riau

Tatang Ary Gumanti

Bhayangkara Jakarta Raya University - Faculty of Economics

Uliya Nurjannah

University of Jember - Faculty of Economics

Intan Nurul Awwaliyah

Department of Management, University of Jember; Department of Management, Universitas Indonesia

Date Written: 2020

Abstract

In 2014, Indonesia was announced to be the host the 2018 XVIII Asian Games, the biggest sports event in Asia. This announcement is expected to positively impact the country’s economy and investors as there would be thousands of spectators from both the country and overseas. A direct impact of the event is that Indonesia would prepare the entire venue. This study examines whether the capital market participants react to the announcement. For this purpose it tests a total of 25 companies in the infrastructure, utility, and transportation sectors listed on the Indonesia Stock Exchange. A standard event study methodology is employed to examine the existence of abnormal returns around the event. The results show the abnormal returns on two days before and two days after the announcement. However, overall, there are no significant abnormal returns before and after the announcement. The study does not find a significant difference of abnormal returns before and after the announcement. Besides, there was no difference in trading volume activity before and after the announcement as the host of the XVIII Asian Games. In summary, the capital market participants do not consider the event to be a significant issue that determines their investment decision in the capital market.

Keywords: Event Study, Abnormal Returns, Market Reaction, Asian Games

JEL Classification: G11, G12, G14

Suggested Citation

Andreas, Andreas and Gumanti, Tatang Ary and Nurjannah, Uliya and Awwaliyah, Intan Nurul, ‘The Effect of Announcement As the Host of XVIII Asian Games on the Indonesian Stock Market’ (2020). Andreas, Tatang Ary Gumanti, Uliya Nurjannah and Intan Nurul Awwaliyah. The effect of announcement as the host of XVIII Asian Games on the Indonesian stock market. Investment Management and Financial Innovations, 17(1), 109-118, 2020, DOI: 10.21511/imfi.17(1).2020.10, Available at SSRN: https://ssrn.com/abstract=3549960

Andreas Andreas (Contact Author)

Universitas Riau ( email )

Pekanbaru
28293
Indonesia

Tatang Ary Gumanti

Bhayangkara Jakarta Raya University - Faculty of Economics

Indonesia

Uliya Nurjannah

University of Jember - Faculty of Economics

Jl Kalimantan No 37
Tegal Boto
Jember, 68121
Indonesia

Intan Nurul Awwaliyah

Department of Management, University of Jember ( email )

Jl. Kalimantan 17
Jember, East Java 68137
Indonesia
+62331337990 (Phone)

HOME PAGE: http://feb.unej.ac.id/?lang=en

Department of Management, Universitas Indonesia ( email )

Campus UI Depok
Depok, West Java 16424
Indonesia

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
17
Abstract Views
161
PlumX Metrics