The Effect of Interactive Social Media Platforms on Stock Market Participation During the COVID-19 Pandemic in Indonesia: Case Study in the Java Island

  • Albert Nathanael
  • Yunieta Anny Nainggolan

Abstract

This paper aims to examine the effect of learning from interactive social media platforms on stock market participation of domestic retail investors during the COVID-19 pandemic in the Java Island, Indonesia. The upsurge of retail investors and active social media users and also the detrimental effect of COVID-19 pandemic on Indonesia stock market became the urgent opportunity to increase the stock market participation. Analysing a survey data consists of 362 respondents, we find that the increase in number of social networking sites and online stock communities promote stock market participation. Furthermore, Instagram, Twitter, and YouTube are proven to increase stock market participation for social networking sites and for online stock communities, Telegram is also proven to increase stock market participation. On the other hand, there is no enough evidence that Facebook significantly promote stock market participation. Our findings suggest policymakers should consider social media platforms that promote stock market participation when developing financial education program. Therefore, it is hoped that the increase in stock market participation will lead to a better economic condition for Indonesia.

References

Almenberg, J. and Dreber, A. (2012). Gender, Stock Market Participation and Financial Literacy. SSRN Electronic Journal. doi:10.2139/ssrn.1880909.
Andersen, E.B. (1991). The Logit Model. The Statistical Analysis of Categorical Data, pp.239–268. doi:10.1007/978-3-642-97353-6_8.
Arts, L. (2018). Financial literacy and stock market participation: The moderating effect of country-specific social connectedness (Dissertation). Retrieved from http://urn.kb.se/resolve?urn=urn:nbn:se:uu:diva-347174
Bujang, M.A., Sa’at, N., Tg Abu Bakar Sidik, T.M.I. and Chien Joo, L. (2018). Sample Size Guidelines for Logistic Regression from Observational Studies with Large Population: Emphasis on the Accuracy Between Statistics and Parameters Based on Real Life Clinical Data. Malaysian Journal of Medical Sciences, 25(4), pp.122–130. doi:10.21315/mjms2018.25.4.12.
Christiansen, C., Joensen, J.S. and Rangvid, J. (2014). Understanding The Effects of Marriage and Divorce on Financial Investments: The Role of Background Risk Sharing. Economic Inquiry, 53(1), pp.431–447. doi:10.1111/ecin.12113.
Cole S. A., Shastry G. K. (2009). Smart Money: The Effect of Education, Cognitive Ability, and Financial Literacy on Financial Market Participation. Boston, MA: Harvard Business School.
Collins, C. N. (2020) ‘Effect of COVID-19 Pandemic on Global Stock Market Values: A Differential Analysis’, Acta Universitatis Danubius (Economica), 16(255–269).
Contessi, Silvio, and Pierangelo De Pace. “The International Spread of COVID-19 Stock Market Collapses.” Finance Research Letters, Jan. 2021, p. 101894, 10.1016/j.frl.2020.101894. Accessed 10 Feb. 2021.
Dong, T., Eugster, F. and Nilsson, H. (2022). Business school education, motivation, and young adults’ stock market participation☆. Journal of Accounting and Public Policy, p.106958. doi:10.1016/j.jaccpubpol.2022.106958.
Elena, V. D. (2020). The COVID-19 Impact on Bucharest Stock Exchange. The First Six Months. Studies in Business and Economics, 15(2), 256–269. https://doi.org/10.2478/sbe-2020-0039.
Fernandes, N. “Economic Effects of Coronavirus Outbreak (COVID-19) on the World Economy.” SSRN Electronic Journal, vol. 2, no. 1, 2020, papers.ssrn.com/sol3/papers.cfm?abstract_id=3557504, 10.2139/ssrn.3557504.
He, W., Guo, L., Shen, J. and Akula, V. (2016). Social Media-Based Forecasting. Journal of Organizational and End User Computing, 28(2), pp.74–91. doi:10.4018/joeuc.2016040105.
Hosmer, D.W. and Lemeshow, S. (1989) Applied Logistic Regression. John Wiley & Sons, Inc., New York.
Hurd, M., Van Rooij, M. and Winter, J. (2011). Stock market expectations of Dutch households. Journal of Applied Econometrics, 26(3), pp.416–436. doi:10.1002/jae.1242.
Ishomuddin. (2010). Analisis Pengaruh Variabel Makroekonomi Dalam dan Luar Negeri terhadap Indeks Harga Saham Gabungan (IHSG) di BEI periode1999.1-2009.12 (Analisis Seleksi Model OLS-ARCH/GARCH). UniversitasDiponegoro.
Junaedi, D., & Salistia, F. (2020). DAMPAK PANDEMI COVID-19 TERHADAP PASAR MODAL DI INDONESIA: Al-Kharaj : Jurnal Ekonomi, Keuangan & Bisnis Syariah, 2(2), 109–138. https://doi.org/10.47467/alkharaj.v2i4.112
Kadoya, Y., Khan, M., & Rabbani, N. (2017). Does Financial Literacy Affect Stock Market Participation? SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3056562
Kusnandar, D. L., & Bintari, V. I. (2020). Perbandingan Abnormal Return Saham Sebelum dan Sesudah Perubahan Waktu Perdagangan Selama Pandemi Covid-19. Jurnal Pasar Modal Dan Bisnis, 2(2). https://doi.org/10.37194/jpmb.v2i2.49
Lalwani, V., & Meshram, V. V. (2020). Stock Market Efficiency in the Time of COVID-19: Evidence from Industry Stock Returns. International Journal of Accounting & Finance Review, 5(2), 40–44. https://doi.org/10.46281/ijafr.v5i2.744
Li, L., Lee and Luo, D. (2021). Gender Differences in Stock Market Participation: Evidence From Chinese Households. SSRN Electronic Journal. doi:10.2139/ssrn.3775478.
Liu, L., Wu, J., Li, P. and Li, Q. (2015). A social-media-based approach to predicting stock comovement. Expert Systems with Applications, [online] 42(8), pp.3893–3901. doi:10.1016/j.eswa.2014.12.049.
Ozili and Arun. “Spillover of COVID-19: Impact on the Global Economy.” SSRN Electronic Journal, 2020, papers.ssrn.com/sol3/papers.cfm?abstract_id=3562570, 10.2139/ssrn.3562570.
Park, C.-Y., & Mercado, R. J. (2015). Financial Inclusion, Poverty, and Income Inequality in Developing Asia. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2558936
Pitaloka, H. et al. (2020) ‘The Economic Impact of the Covid-19 Outbreak : Evidence from Indonesia Research Method’, Jurnal Inovasi Ekonomi, 05(02), pp. 71–76.
Showkat, N., & Parveen, H. (2017). Non-Probability and Probability Sampling. e-PG Pathshala.
Tham, E. (2018). Social Media Impact on Household Investors and Their Stock Markets Participation. SSRN Electronic Journal. doi:10.2139/ssrn.3224531.
Van Rooij, M., Lusardi, A. and Alessie, R. (2011). Financial literacy and stock market participation. Journal of Financial Economics, [online] 101(2), pp.449–472. doi:10.1016/j.jfineco.2011.03.006.
Vissing-Jørgensen, A., & Attanasio, O. P. (2003b). Stock-Market Participation, Intertemporal Substitution, and Risk-Aversion. American Economic Review, 93(2), 383–391. https://doi.org/10.1257/000282803321947399
Published
2022-09-01
How to Cite
NATHANAEL, Albert; ANNY NAINGGOLAN, Yunieta. The Effect of Interactive Social Media Platforms on Stock Market Participation During the COVID-19 Pandemic in Indonesia: Case Study in the Java Island. International Journal of Business and Technology Management, [S.l.], v. 4, n. 3, p. 104-115, sep. 2022. ISSN 2682-7646. Available at: <https://myjms.mohe.gov.my/index.php/ijbtm/article/view/19331>. Date accessed: 21 apr. 2024.
Section
Articles