Does super deduction R&D ï¬nancial policy in the pandemic Covid-19 give a super reaction?

Cahyani Tunggal Sari; Eni Puji Estuti; Ariyani Indriastuti

doi:10.14414/jbb.v11i2.2711

Vol. 11 No. 2 (2021), Articles

Vol. 11 No. 2 (2021) Pages 201-211

Does super deduction R&D ï¬nancial policy in the pandemic Covid-19 give a super reaction?

Cahyani Tunggal Sari⁺⁻
Eni Puji Estuti⁺⁻
Ariyani Indriastuti⁺⁻

Cahyani Tunggal Sari

SEKOLAH TINGGI ILMU EKONOMI SEMARANG

Eni Puji Estuti

Sekolah Tinggi Ilmu Ekonomi Semarang

Ariyani Indriastuti

Sekolah Tinggi Ilmu Ekonomi Semarang

DOI: 10.14414/jbb.v11i2.2711

Published 2022-04-26

PDF

Keywords

Abnormal return
Portfolio
Super deduction policy.

How to Cite

Sari, C. T., Estuti, E. P., & Indriastuti, A. (2022). Does super deduction R&D ï¬nancial policy in the pandemic Covid-19 give a super reaction? Journal of Business & Banking, 11(2), 201-211. https://doi.org/10.14414/jbb.v11i2.2711

Abstract

This research was motivated by the announcement of the super deduction R&D ï¬nan- cial policy (PMK 153/2020) issued by the Indonesian government during the Covid-19
in 2020. This study tried to test and empirically prove either the presence or absence of
abnormal returns on the day around the announcement, before and after the announce-
ment optimal portfolio of pharmaceutical and health sector stocks during the observation
time around the announcement of the super deduction R&D ï¬nancial policy. This is
a quantitative research with event study using hypothesis testing from one sample
t-test and paired sample t-test. The results showed that there was 1 day of observation,
which indicated an abnormal return around the announcement day. Overall, before
and after being announced based on the results of the paired sample t-test, it did not
show any abnormal returns. The highest optimal portfolio analysis is on stock of Darya Varia Laboratoria company which have a weighting of 40.86% and there are two stocks that are not optimal. This study shows that there is a reaction of market participants to pharmaceutical and health stocks on the announcement even though the reaction is very small. Based on the result, there is a need for information related to research and development activities of pharmaceutical and health companies for investors if they want to improve their stock performance.

References

Adriatama, I., & Rahadi, R. A. (2021). Effect of Governmental

Announcement and Decisions During Covid-19 on Indonesian Sectoral Indexes. Jurnal Manajemen Dan Kewirausahaan, 23(1), 61â€“75. https://doi.org/10.9744/jmk.23.1.61-75

Armstrong, J. S., Coviello, N., & Safranek, B. (1993). Escalation Bias: Does it Extend to Marketing?. Journal of the Academy of Marketing Science, 21(3), 247â€“253. https://doi.org/10.1177/0092070393213008.

Barunik, J., Drabek, Z., & Nevrla, M. (2020). Investment Disputes and Abnormal Volatility of Stocks. ArXiv:2006.10505 [q-Fin]. http:// arxiv.org/abs/2006.10505

Deng, P., Lu, H., Hong, J., Chen, Q., & Yang, Y. (2019). Government R&D Subsidies, Intellectual Property Rights Protection and Innovation. Chinese Management Studies, 13(2), 363â€“378. https:// doi.org/10.1108/CMS-02-2018-0422

There are 27 references. More references >>

Adriatama, I., & Rahadi, R. A. (2021). Effect of Governmental

Announcement and Decisions During Covid-19 on Indonesian Sectoral Indexes. Jurnal Manajemen Dan Kewirausahaan, 23(1), 61â€“75. https://doi.org/10.9744/jmk.23.1.61-75

Armstrong, J. S., Coviello, N., & Safranek, B. (1993). Escalation Bias: Does it Extend to Marketing?. Journal of the Academy of Marketing Science, 21(3), 247â€“253. https://doi.org/10.1177/0092070393213008.

Barunik, J., Drabek, Z., & Nevrla, M. (2020). Investment Disputes and Abnormal Volatility of Stocks. ArXiv:2006.10505 [q-Fin]. http:// arxiv.org/abs/2006.10505

Deng, P., Lu, H., Hong, J., Chen, Q., & Yang, Y. (2019). Government R&D Subsidies, Intellectual Property Rights Protection and Innovation. Chinese Management Studies, 13(2), 363â€“378. https:// doi.org/10.1108/CMS-02-2018-0422

Dilla, S., Sari, L. K., & Achsani, N. A. (2020). Estimating the Effect of the Covid-19 Outbreak Events on the Indonesia Sectoral Stock Return. Jurnal Aplikasi Bisnis Dan Manajemen. https://doi.org/10.17358/ jabm.6.3.662

Erdogan, M., & Yamaltdinova, A. (2019). A Panel Study of the Impact of R&D on Financial Performance: Evidence from an Emerging Market.

Procedia Computer Science, 158, 541â€“545. https://doi.org/10.1016/j. procs.2019.09.087

Freihat, A. R. F., & Kanakriyah, R. (2017). Impact of R&D Expenditure on Financial Performance: Jordanian Evidence. European Journal of Business and Management, 11.

Guerin, P. J., Singh-Phulgenda, S., & Strub-Wourgaft, N. (2020). The consequence of COVID-19 on the global supply of medical products:Why Indian generics matter for the world?. F1000Research, 9, 225. https://doi.org/10.12688/f1000research.23057.1

Guo, B., Wang, J., & Wei, S. X. (2018). R&D spending, Strategic Position and Firm Performance. Frontiers of Business Research in China, 12(1), 14. https://doi.org/10.1186/s11782-018-0037-7

Gupta, S. (2017). Returns from Strategies Adopted by MNEs to Improve Global Health and Wellbeing: Third Sustain-able Development Goal. In P. N. Ghauri, X. Fu, & J. VÃ¤Ã¤tÃ¤nen (Eds.), International Business and Management, 33, 151â€“172. https://doi.org/10.1108/ S1876-066X20170000033007

Jaisinghani, D. (2016). Impact of R&D on Proï¬tability in the Pharma Sector: An Empirical Study from India. Journal of Asia Business Studies, 10(2), 194â€“210. https://doi.org/10.1108/JABS-03-2015-0031

Kusnandar, D. L., & Bintari, V. I. (2020). Perbandingan Abnormal Return Saham Sebelum dan Sesudah Perubahan Waktu Perdagangan Selama Pandemi Covid-19. Jurnal Pasar Modal dan Bisnis, 2(2). https://doi.org/10.37194/jpmb.v2i2.49

Lim, H., & Rokhim, R. (2021). Factors Affecting Proï¬tability of

Pharmaceutical Company: An Indonesian Evidence. Journal of Economic Studies, 48(5), 981â€“995. https://doi.org/10.1108/JES-01- 2020-0021

Mahajan, V. (2020). Is productivity of Indian Pharmaceutical Industry Affected with the Introduction of Product Patent Act?. Indian Growth and Development Review, 13(1), 227â€“258. https://doi.org/10.1108/ IGDR-11-2018-0116

Medeiros, O. R. D., & Matsumoto, A. S. (2006). Market Reaction to Stock Issues in Brazil: Insider Trading, Volatility Effects and the New Issues Puzzle. Investment Management and Financial Innovations, 3(1), 10.

Pal, K., & Soriya, S. (2012). IC performance of Indian pharmaceutical and textile industry. Journal of Intellectual Capital, 13(1), 120â€“137. https:// doi.org/10.1108/14691931211196240

Pan, Y., Huang, Y., & Qi, E. (2016). Chinese Manufacturing Industry Development Strategy from the Financial Perspective: Grey Modeling and Analysis of Data From the Listing Corporation China Pharmaceutical Manufacturing Enterprises. Grey Systems: Theory and Application, 6(2), 203â€“215. https://doi.org/10.1108/GS-02-2016- 0003

Panyagometh, K. (2020). The Effects of Pandemic Event on the Stock Exchange of Thailand. Economies, 8(4), 90. https://doi.org/10.3390/ economies8040090

Saputra, M. Y., Yetti, F., & Hidayati, S. (2020). Analisis Abnormal Return Sebelum dan Saat Pandemi Covid-19 terhadap Saham Sektor Food And Beverages. 2, 10.

Saraswati, N. M. A. W., & Mustanda, I. K. (2018). Reaksi Pasar Modal Indonesia terhadap Peristiwa Pengumuman Hasil Penghitungan Suara Pemilihan Umum dan Pelantikan Presiden Amerika Serikat. E-Jurnal Manajemen Universitas Udayana, 7(6), 2971. https://doi. org/10.24843/EJMUNUD.2018.v07.i06.p05

Setiawan, R., & Harmasanto, D. H. (2019). Pengeluaran R&D dan Kinerja Perusahaan Manufaktur di Bursa Efek Indonesia yang Dimoderasi oleh Usia Perusahaan. Jurnal Riset Akuntansi dan Bisnis Airlangga, 4(2), Article 2. https://doi.org/10.31093/jraba.v4i2.165

Spence, M. (1973). Job Market Signaling. Quarterly Journal of Economics.

Zang, Z., Zhu, Q., & MogorrÃ³n-Guerrero, H. (2019). How Does R&D Investment Affect the Financial Performance of Cultural and Creative Enterprises? The Moderating Effect of Actual Controller.

Sustainability, 11(2), 297. https://doi.org/10.3390/su11020297

Does super deduction R&D ï¬nancial policy in the pandemic Covid-19 give a super reaction?

Keywords

How to Cite

Download Citation

Abstract

References