Electronic Resource

Covid-19, Herding Behaviour And Fair Value Breakthrough : The Moderation Effect Of Corporate Governance

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Purpose – This study aims to investigate whether fair value adoption and disclosure
can reduce irrationality among investors in Indonesia's Islamic stock market during
pandemics. It also examines whether the corporate governance can affect fair value
adoption and disclosure and moderate the relationship between fair value adoption
and disclosure and investor herding behaviour.
Design/Methodology/approach – This study employs the panel data regression
and Moderation test with the total sample of 54 companies listed in Jakarta Islamic
Index 70 (JII70) during 2019-2020 using purposive sampling method.
Findings – The findings reveal the presence of investor herding behaviour in
Indonesia Islamic stock market during pandemic. In addition, the result suggests
that the adoption and disclosure of fair value in company’s financial information
led to the higher intention of investor to herd in financial stock market. Regard to
the fair value adoption and disclosure, this study confirms that the corporate
governance has negatively influence the fair value adoption and disclosure. Thus,
it appears to follow that the better the corporate governance the less likely it is that
fair values will be adopted and disclosed as a tool to reduce investor herding
behaviour.
Practical Implication – This study further suggests the companies to develop the
appropriate disclosures as well as the financial authorities to consider and discuss
the adoption of a dual measurement and reporting system at a standard setting level,
as this research has shown, the adoption of fair value has its own detriments while
the adoption of historical cost alone is unlikely to be a remedy. Additionally, in
order to address the issue of market herding, it is advised that investors retain their
rationality by conducting financial and technical analysis before making any
investing decisions.
Originality – This study is the first attempt to investigate accounting responses to
market phenomena driven on by investors' irrational behaviour, particularly with
respect to herding behaviour. Thus, it is envisaged that the study's findings will
serve as evidence for the usefulness of fair value accounting.

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Detail Information

Series Title

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Call Number

REF 658.152 ASF c

Publisher

Bogor : IAI Tazkia., 2022

Collation

AS

Language

English

ISBN/ISSN

NIM.18102002

Classification

658.152

Content Type

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Media Type

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Carrier Type

-

Edition

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Subject(s)

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Specific Detail Info

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Statement of Responsibility

Asfa Asfia

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