The impact of inception of Indonesia investment authority (INA) on the firm performance : study on kompas100 index listed companies
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Institusion
Sekolah Tinggi Manajemen Ipmi
Author
Dzikro, Shafa Iqlima
Subject
H Social Sciences (General)
Datestamp
2022-08-16 08:41:24
Abstract :
The role of foreign investments in fostering economic growth and creating prosperity gains importance as the world becomes more global. Earlier in Indonesia, a sovereign wealth fund (SWF); Indonesia investment authority (INA), was set up to improve the investment climate by maximizing the value of state owned enterprise (SOEs') assets. The role of Indonesia Investment (INA) is to pursue funds from outside to financially-support Indonesia's development through a value-added key sector, Infrastructure. This quantitative study investigates how INA events give impacts on the performance of businesses' sector by enclosing dummy variables; SOEs and infrastructure as firm's specific factors. The dependent variable used is cumulative abnormal return (CAR) around the event windows of eleven trading days. This study used 99 samples derived from KOMOAS100 index, after passing all criteria of purposive sampling in a non-probability test. Methodologies employed are event study and cross-section regression analysis. Event study evidenced INA-related events impacted firm performance; exposed the to significant abnormal returns on certain days over the event window. Cross-sectional analysis decomposition suggests only infrastructure mainly drives most of the CAR in event 1, than event 2. The SWF, on the other hand, did not benefit state-owned enterprises (SOEs) as a whole; only a few of SEOs and in minor sums.
The role of foreign investments in fostering economic growth and creating prosperity gains importance as the world becomes more global. Earlier in Indonesia, a sovereign wealth fund (SWF); Indonesia investment authority (INA), was set up to improve the investment climate by maximizing the value of state owned enterprise (SOEs') assets. The role of Indonesia Investment (INA) is to pursue funds from outside to financially-support Indonesia's development through a value-added key sector, Infrastructure. This quantitative study investigates how INA events give impacts on the performance of businesses' sector by enclosing dummy variables; SOEs and infrastructure as firm's specific factors. The dependent variable used is cumulative abnormal return (CAR) around the event windows of eleven trading days. This study used 99 samples derived from KOMOAS100 index, after passing all criteria of purposive sampling in a non-probability test. Methodologies employed are event study and cross-section regression analysis. Event study evidenced INA-related events impacted firm performance; exposed the to significant abnormal returns on certain days over the event window. Cross-sectional analysis decomposition suggests only infrastructure mainly drives most of the CAR in event 1, than event 2. The SWF, on the other hand, did not benefit state-owned enterprises (SOEs) as a whole; only a few of SEOs and in minor sums.
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