Multinational companies are one indicator of development for a country. The more number of multinational companies open operations in a country, then it will have an impact for the economic improvement of the country. However, in recent years many of these multinational companies have announced retreat from all operations in Indonesia and stop the sale and import of all vehicles. Viewed from the side of investors, certainly provide a variety of responses. Some investors think of this as good news or "good news" so they will buy shares in the automotive sector, and for investors who think the news is bad news they will sell shares in the automotive sector.This study aims to test the market reaction to the closure of multinational corporation operations by examining the abnormal return around the date of announcement both at competitor companies and companies engaged in the same sector.This study is an event study and uses samples from companies listed on the Indonesia Stock Exchange on manufacturing companies in the various industry sectors, and in the automotive sub-sector and components. The test results can be concluded that there is no abnormal return around the occurrence of the announcement of the closing of multinational companies, then this indicates that there is a concurrent market reaction.
Volume 11 | 03-Special Issue