Resilience of ethical and nonethical stock during COVID-19 crisis: a case of Indonesia Stock Exchange

IF 2.5 Q2 BUSINESS, FINANCE Journal of Islamic Accounting and Business Research Pub Date : 2024-05-09 DOI:10.1108/jiabr-03-2023-0113

Abdul Qoyum, Rizqi Umar AlHashfi, Mamduh Mahmadah Hanafi, Hassanudin Mohd Thas Thaker, Jaenal Effendi

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Abstract

Purpose

This study aims to empirically investigates the effect of the COVID-19 pandemic on ethical and nonethical stocks in Indonesia. Ethical stocks which are characterized by moral-based companies’ activities and lower debt are expected to have better resilience during the COVID-19 crisis compared to nonethical stock.

Design/methodology/approach

This study observes 589 firms of ethical and nonethical stock during sample periods ranging from March 2, 2020 (first case announced) to June 30, 2021. Panel regression, with some control variables, was applied.

Findings

Testing firms in Indonesia revealed a significant difference in stock resilience, in which ethical stock has a better resilience compared to nonethical, with Islamic socially responsible investment (SRI) stock having the highest resilience, followed by Islamic stock and then SRI stock. This study documents a significant effect of some financial criteria on the stock resilience, namely, return market (RM), market capitalization (MCAP) and share turnover (TURN). Overall, after splitting the sample into different time horizons, this study consistently reveals that ethical firms have better resilience compared to nonethical stocks.

Research limitations/implications

This study makes several contributions to the literature on Islamic finance, especially concerning Islamic screening with SRI factors. In practical terms, this study supports the argument that focusing on integrating environmental, social and governance criteria in sharia screening will improve the quality of Islamic firms. The “Islamic” label is not only a marketing label but also a quality certification.

Originality/value

This study can be used as a reference for developing Islamic finance more focused on sustainability issues including socioeconomic and human development by improving the quality of screening of Islamic firms. Therefore, this study suggests that the establishment of Islamic SRI index is very crucial and significant to promote ethical-based investment.

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COVID-19 危机期间道德与非道德股票的复原力：印度尼西亚证券交易所案例

目的本研究旨在实证调查 COVID-19 大流行病对印尼道德股和非道德股的影响。道德股的特点是以道德为基础的公司活动和较低的债务，与非道德股相比，道德股有望在 COVID-19 危机中具有更好的抗灾能力。设计/方法/途径本研究在 2020 年 3 月 2 日（第一个案例公布）至 2021 年 6 月 30 日的样本期内观察了 589 家道德股和非道德股公司。研究结果对印度尼西亚的公司进行测试后发现，股票弹性存在显著差异，其中道德股票的弹性优于非道德股票，伊斯兰社会责任投资（SRI）股票的弹性最高，其次是伊斯兰股票，再次是 SRI 股票。本研究记录了一些财务标准对股票弹性的重要影响，即回报市场（RM）、市值（MCAP）和股票周转率（TURN）。总体而言，在将样本划分为不同的时间跨度后，本研究一致显示，与非道德股票相比，道德公司具有更好的抗跌性。研究局限性/意义本研究为伊斯兰金融文献做出了多项贡献，尤其是在利用社会责任投资因素进行伊斯兰筛选方面。从实践角度看，本研究支持这样一种观点，即在伊斯兰教法筛选中注重整合环境、社会和治理标准将提高伊斯兰企业的质量。伊斯兰 "标签不仅是一种营销标签，也是一种质量认证。原创性/价值本研究可作为参考，通过提高伊斯兰企业筛选的质量，发展更加注重社会经济和人类发展等可持续发展问题的伊斯兰金融。因此，本研究认为，建立伊斯兰社会责任投资指数对于促进以道德为基础的投资是非常关键和重要的。

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来源期刊

Journal of Islamic Accounting and Business Research BUSINESS, FINANCE-

CiteScore

4.80

自引率

22.70%

发文量

期刊介绍： The journal provides a dynamic forum for the advancement of accounting and business knowledge based on Shari’ah and Islamic activities that have an impact on the welfare of society. JIABR publishes articles on the interplay between Islamic business ethics, accounting, auditing and governance, in promoting accountability, socio-economic justice (adl) and everlasting success (al-falah). It seeks to inform, among others, current theoretical and empirical research and practice in Islamic accounting, auditing and corporate governance, management of Islamic organizations, accounting regulation and policy for Islamic institutions, Shari’ah auditing and corporate governance, financial and non-financial performance measurement and disclosure in Islamic institutions and organizations. All styles of research, theoretical and empirical, case studies, practice-based papers and research notes that are well written and falling within the journal''s scope, are generally welcomed by the journal. Scope/Coverage Development of accounting, auditing and corporate governance concepts based on Shari’ah Socio-political influence on accounting and auditing regulation and policy making for Islamic financial institutions and organizations Historical perspectives on Islamic accounting, auditing and financial management Critical analysis on issues and challenges on accounting disclosure and measurement, Shari’ah audit and corporate governance Controls and risks in Islamic organizations Financial and non-financial performance measurement and disclosure.