Analysis of the Impact of the Palestinian-Israeli Conflict on Product Boycotts: A Financial Performance and Investor Behavior Perspective

Abstract

This study aims to analyze investor behavior and financial performance and its impact on companies whose products are boycotted due to the Israeli Palestinian conflict. The research data was taken at the beginning of the conflict, one month after the beginning of the conflict, the issuance of the statement of haram to buy products supporting Israel from MUI, the start of the ceasefire, and the end of the ceasefire. The event window used in this study is 11 days, namely 5 days before the event announcement, 1 day on the event occurs or begins, and 5 days after the event announcement. The results of this study in event 1 show that there is no significant difference in Abnormal Return (AR) between the period before and after the start of the Palestinian-Israeli conflict, while the test results on Trading Volume Activity (TVA) show that the trading volume decreased significantly after the conflict began. In event 2, the Abnormal Return (AR) test results indicate that the stock market may not respond to changes in the conflict directly or the impact of the conflict is not large enough to significantly affect AR in the short term. Meanwhile, the Trading Volume Activity (TVA) test results show that there is a significant decrease in Trading Volume Activity after one month since the start of the Palestinian-Israeli conflict. In event 3, the test results show that there is no significant difference in Abnormal Return (AR) and Trading Volume Activity (TVA).