Corporate governance concept became stronger in Indonesia after the economic crisis that occurred in 1997 because of lack of legal, unestablished accounting and auditing standards, underegulated capital market, weak supervision of the Commissioners and the neglect of minority rights. To solve these problems, companies implemented corporate governance concept so that access to low cost-debt financing will be easily obtained. Therefore, corporate governance is a factor that cannot be ignored in decision making for creditors.
The development of the Indonesian capital market is heavily influenced by global macroeconomics and economic conditions. The purpose of this study is to evaluate the reaction of the Indonesian capital market to LQ45 stocks before and after the announcement of war between Russia and Ukraine on February 24, 2022. The Composite Stock Price Index (IHSG) and the daily closing price of the corporation are utilized as secondary data. In this study, hypotheses were evaluated using the Wilcoxon signed-rank test and the one-sample t-test. The data indicated that the Indonesian capital market’s response to the Russia-Ukraine conflict was neglible, although abnormal returns in the mining, finance, consumer, and real estate sectors differ significantly.
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