Open AccessPublic perception and firm’s market performance: The case of Annual Report Award in the emerging economy
Author(s) -
Antonius Alijoyo,
Kevin Bastian Sirait
Publication year - 2022
Publication title -
journal of governance and regulation
Language(s) - English
Resource type - Journals
eISSN - 2306-6784
pISSN - 2220-9352
DOI - 10.22495/jgrv11i1art8
Subject(s) - event study , corporate governance , perception , affect (linguistics) , abnormal return , value (mathematics) , business , capital market , enterprise value , market value , stock market , accounting , stock (firearms) , monetary economics , economics , financial economics , stock exchange , finance , psychology , mechanical engineering , paleontology , context (archaeology) , communication , horse , neuroscience , machine learning , computer science , engineering , biology
It has been a general belief that the public’s perception can affect the firm’s value. Subsequently, many initiatives have been made by various governments to pull such effects on their listed firm. Particularly in Indonesia, one of those initiatives is known as Annual Report Award (ARA), whereby its participants are required to show their good corporate governance (GCG) practices. Thus, the purpose of this study is to investigate the 2018 ARA’s effect on the market performance of its listed firms’ categories. In which, the analysis focuses on the categories’ abnormal returns and the abnormal trading volume. Through the application of the event study methodology, the findings imply that the Indonesian capital market is more attentive to the participants within the financial state-owned enterprise category, and 2018 ARA has helped increase the participants’ abnormal return within the respective category. Although an increase in abnormal returns is not necessarily accompanied by an increase in abnormal trading volume, the findings also suggest that the 2018 ARA can influence participants’ stock returns across multiple market indices. Hence, the ARA event could influence the public’s perception and, simultaneously, bringing added value to its participants.