Beyond the ballot: Examining stock market reaction in the emerging market
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Joanne Valesca Mangindaan 
, Hendrik Manossoh, Olivia Fransiske Christine Walangitan
This work is licensed under a Creative Commons Attribution 4.0 International License.
Abstract
This article examines the Indonesian stock market’s response to presidential elections, with a particular focus on the key events surrounding the 2019 and 2024 elections. By employing an event study methodology, the research evaluates abnormal returns (AR) of LQ45 firms. The findings indicate that the stock market exhibited a pronounced reaction during the 2019 presidential election, with notable AR occurring both before and immediately following the announcement of the election results. In contrast, the market response to the 2024 election was more subdued, characterized by delayed reactions emerging after the electoral events had taken place. This study contributes to the existing body of literature by emphasizing the evolving nature of investor behavior in response to political events in Indonesia. It suggests that increased political stability and greater investor familiarity with the electoral process may have influenced the observed market reactions. These results underscore the importance of understanding the interaction between political events and market performance, offering valuable insights for both investors and policymakers.
Keywords: Presidential Election, Abnormal Return, Stock Market Reaction
Authors’ individual contribution: Conceptualization — J.V.M. and H.M.; Methodology — J.V.M.; Validation — O.F.C.W.; Resources — H.M. and O.F.C.W.; Writing — Original Draft — J.V.M. and O.F.C.W.; Writing — Review & Editing — J.V.M. and H.M.; Visualization — J.V.M. and O.F.C.W.; Supervision — J.V.M.
Declaration of conflicting interests: The Authors declare that there is no conflict of interest.
JEL Classification: C58, G14, P34
Received: 11.06.2025
Revised: 24.09.2025; 01.12.2025
Accepted: 12.12.2025
Published online: 15.12.2025
How to cite this paper: Mangindaan, J. V., Manossoh, H., & Walangitan, O. F. C. (2025). Beyond the ballot: Examining stock market reaction in the emerging market. Risk Governance and Control: Financial Markets & Institutions, 15(4), 154–163. https://doi.org/10.22495/rgcv15i4p14
