Open AccessImpact of Smoking Ban Fatwa on Indonesian Tobacco’s Company
Author(s) -
Gatot Soepriyanto,
Paulina Santoso
Publication year - 2013
Publication title -
international journal of finance and banking studies
Language(s) - English
Resource type - Journals
ISSN - 2147-4486
DOI - 10.20525/ijfbs.v2i2.147
Subject(s) - tobacco industry , revenue , business , profit (economics) , smoking ban , indonesian , tobacco control , population , market share , share price , advertising , economics , accounting , marketing , environmental health , finance , stock exchange , medicine , law , political science , public health , linguistics , philosophy , nursing , microeconomics
The objective of this study is to assess the share price reactions to smoking ban fatwa on Indonesia tobacco’s company. We expect that the smoking ban fatwa in the world’s largest Muslim population will hit the tobaccos industry revenues, lower tobacco’s company profit and eventually affect the share price of those firms. We use event study methodology and standard market model to calculate abnormal returns of the tobacco’s firms related to the news of smoking ban fatwa. Our study failed to find a statistically significant effect of smoking ban fatwa on tobacco’s firm stock market return. It suggests that the investors do not see the fatwa as a factor that may control the tobacco consumption in Indonesia – thus it may not affect the tobacco’s firm revenues and profit in the future