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All Journal Studi Akuntansi dan Bisnis Indonesia
Arya Nurhasan
Universitas Lampung
Economics, Econometrics & Finance

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Indonesian Stock Market Reaction to U.S. Liberation Day Tariff on Export Firms Arya Nurhasan; Retno Yuni Nur Susilowati
Studi Akuntansi dan Bisnis Indonesia Vol 2 No 2 (2026): April
Publisher : Lembaga Penelitian dan Pengabdian kepada Masyarakat (LPPM), Sekolah Tinggi Ilmu Ekonomi Krakatau

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.61401/sabi.v2i2.495

Abstract

Purpose: This study examines the reaction of Indonesia's capital market to the U.S. Liberation Day Tariff announcement on April 2, 2025, focusing on export-exposed firms listed on the Indonesia Stock Exchange (IDX). Methodology: An event study is applied across 62 IDX-listed firms over a 21-trading-day window, analyzing abnormal returns and trading volume activity using the market-adjusted model and Wilcoxon signed rank test. Results: The tariff announcement produced a significant negative difference in abnormal returns, with investors perceiving the policy as bad news for export-oriented firms. The average abnormal return was partially significant, with an immediate event-day response and persistent negative reactions post-announcement. Trading volume activity showed no significant difference, reflecting the caution of investors. Conclusions: Price movements support semi-strong market efficiency, while the absence of a volume response confirms that price and volume reactions do not always co-move under the same informational events. Limitations: The Market Adjusted Model assumes homogeneous firm risk, sector-level comparative analysis was not conducted, and domestic macroeconomic variables were not controlled for. Contribution: This study provides novel multisector evidence on how an emerging market responds to unilateral trade protectionism, contributing to the literature on event studies, signaling theory, and trade policy reactions.
Co-Authors Retno Yuni Nur Susilowati