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Market Reactions on Corporate Actions in Growing and Nongrowing Energy Consuming Companies

Author

Listed:
  • Andini Nurwulandari

    (Nasional University, Jakarta, Indonesia)

  • Hasanudin Hasanudin

    (Nasional University, Jakarta, Indonesia)

  • Melati Melati

    (Nasional University, Jakarta, Indonesia)

Abstract

This paper aims to analyze the market reactions on corporate actions in the form of split-up, reverse split, right issue, and mergers and acquisitions in growing and non-growing energy consuming companies in Indonesia. The market reaction is analyzed based on stock price, trading volume, and abnormal returns movements using paired sample t-tests from the results of the event study for five days before and after corporate actions in the form of split-up, reverse split, right issue, and mergers and acquisitions. The results showed that stock prices reacted positively on the split-up in growing energy consuming companies, while in non-growing energy consuming companies, stock prices did not react significantly. However, the abnormal returns of growing and non-growing energy consuming companies both showed a negative movement, while the trading volumes did not react significantly. This paper specifically analyzes the market reaction on corporate actions in growing and non-growing energy consuming companies to provide interesting insights about the different reactions given by the market to corporate actions carried out by the companies with different growth categories.

Suggested Citation

  • Andini Nurwulandari & Hasanudin Hasanudin & Melati Melati, 2021. "Market Reactions on Corporate Actions in Growing and Nongrowing Energy Consuming Companies," International Journal of Energy Economics and Policy, Econjournals, vol. 11(3), pages 290-295.
    • Handle: RePEc:eco:journ2:2021-03-35
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Market reaction; corporate action; split-up; reverse split; right issue; merger and acquisition;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • Q35 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Hydrocarbon Resources
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources

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