Sarumpaet, Susi and Mareta, Ayu Riani and Komalasari, Agriyanti (2015) JOKOWI EFFECT: A STUDY ON THE MARKET REACTION TO THE PRESIDENTIAL ELECTION IN INDONESIA. In: The 16th Asian Academic Accounting Association Annual Conference, 15-18 November, 2015, Bandung, Indonesia.

15 Susi FourA Bandung.pdf

Download (1MB) | Preview
15 Sertkt Pemakalah FOurA Bandung.pdf

Download (646kB) | Preview
Official URL:


This study aims to provide evidence on how share markets respond to political events, such as presidential election. Specifically, we investigate the so called “Jokowi effect” on the share prices of Indonesia Stock Exchange surrounding the Indonesian presidential election in 2014. Jokowi is the nickname of the president candidate, Joko Widodo, and Jokowi effect is a term to describe the influence of media popularity of Governor of Jakarta Jokowi on Indonesian politics and economy. In this study, we focus on the changes of share prices and trading volumes of listed firms in the sectors that would presumably be affected by Jokowi’s victory, namely: infrastructure, utilities, transportation, construction and building. A sample of 46 firms listed on Indonesian stock exchange was obtained after excluding firms experiencing corporrate actions, such as take overs and mergers. Employing an event study method, we calculate the abnormal returns and trading volumes surrounding three critical events of the election process: the announcement of Jokowi’s candidacy, the releases of quick-count results, and the verdict by the Constitutional Court. We find that the Indonesian stock market responds positively to Jokowi’s candidacy as well as the release of the Quick Count results. However, we do not find such a market response to verdict by the constitutional court. Results of this study supports empirical evidence from the previous studies that political events does have information content. Such findings also support the previous literature suggesting the value relevance of non-accounting information. Keywords: share price, abnormal return, trading

Item Type: Conference or Workshop Item (Paper)
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
Divisions: Fakultas Ekonomi dan Bisnis (FEB) > Prodi Magister Ilmu Akuntansi
Depositing User: Susi Sarumpaet
Date Deposited: 18 Oct 2019 03:14
Last Modified: 18 Oct 2019 03:14

Actions (login required)

View Item View Item