Title: Financial impact of COVID-19: non-pharmaceutical interventions in Indonesia

Authors: Ana Noveria; Muhamad Fikri

Addresses: School of Business and Management, Institut Teknologi Bandung, Bandung, Indonesia ' School of Business and Management, Institut Teknologi Bandung, Bandung, Indonesia

Abstract: The COVID-19 pandemic is a global crisis that has influenced everyone's daily life and the business sector. The Indonesian government has implemented policies to control the spread of the pandemic. These policies, including large-scale social restrictions (LSSR), emergency public activity restrictions, and economic support, have affected the investors' reactions. Therefore, this research aimed to investigate how the government policies regarding the COVID-19 pandemic influence the stock returns on the Indonesia Stock Exchange (IDX). The results showed that policies on closures of public places negatively affect stock returns. However, the economic support from the government positively affects the stock returns. This study contributes to the literature on the effect of government response to the COVID-19 pandemic on the stock returns. The results could also be used as considerations for the government in making policies to prevent the future spread of the COVID-19 pandemic and mitigate the adverse impact on the business sector. Additionally, investors could consider the result in making decisions on responding to announced policies.

Keywords: COVID-19 pandemic; government response; Indonesia stock returns.

DOI: 10.1504/IJMEF.2023.131910

International Journal of Monetary Economics and Finance, 2023 Vol.16 No.3/4, pp.206 - 212

Received: 14 Feb 2022
Accepted: 19 Aug 2022
Published online: 04 Jul 2023 *

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