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Market Reaction to Cabinet Reshuffle: The Indonesian Evidence

Author

Listed:
  • Supramono Supramono

    (Department of Management, Faculty of Economics and Business Universitas Kristen Satya Wacana Salatiga, Indonesia,)

  • Widhiastuti Wilis

    (Department of Management, Faculty of Economics and Business Universitas Kristen Satya Wacana Salatiga, Indonesia,)

  • I. Utami

    (Department of Management, Faculty of Economics and Business Universitas Kristen Satya Wacana Salatiga, Indonesia,)

Abstract

This event study investigates the Indonesian capital market reaction to the announcement of cabinet reshuffle as a major political event in Indonesia. We also detect the possibility of size effect anomaly related to this political event. Consequently, we not only study 43 large-capitalization firms that are classified into LQ 45 index but also 26 small-capitalization shares. Our findings show that there is no significant abnormal return surrounding the announcement date. We conclude that the announcement of cabinet reshuffle does not contain information value to the market and does not cause size effect.

Suggested Citation

  • Supramono Supramono & Widhiastuti Wilis & I. Utami, 2017. "Market Reaction to Cabinet Reshuffle: The Indonesian Evidence," International Journal of Economics and Financial Issues, Econjournals, vol. 7(5), pages 183-188.
    • Handle: RePEc:eco:journ1:2017-05-22
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    event study; market reaction; size effect; cabinet reshuffle; abnormal return.;
    All these keywords.

    JEL classification:

    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics

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