Journal of Economics and Trade

Financial Performance and Market Valuation under Geopolitical Sentiment: A Conceptual Framework of Boycott and Substitution Effects in Indonesia

Annisa Karimah, Tri Joko Prasetyo, Usep Syaipudin — Fri, 22 May 2026 00:00:00 +0000

Background: The increasing escalation of geopolitical conflicts has transformed consumer boycott movements into a form of systemic economic pressure that significantly influences corporate financial performance and stock market valuation, particularly among multinational-affiliated firms operating in emerging markets such as Indonesia. In the Indonesian context, geopolitical boycott sentiment triggered by public and religious responses has created asymmetric market effects, where affiliated multinational firms experience financial deterioration while local substitute firms benefit from shifting consumer preferences and capital reallocation.

Aims: This conceptual article aims to examine how geopolitical sentiment, evolving into systemic risk, affects financial performance and market valuation dynamics of firms listed on the Indonesia Stock Exchange (IDX), particularly through boycott and substitution effects.

Study Design: The study adopts a conceptual research design by developing a theoretical framework grounded in Signaling Theory and Stakeholder Theory to explain the asymmetric impacts between multinational (affiliated) and local (substitution) firms. As a conceptual paper, this study does not apply statistical sampling techniques; instead, it conceptually focuses on publicly listed firms on the Indonesia Stock Exchange that are potentially exposed to geopolitical boycott sentiment, including multinational-affiliated firms and domestic substitute firms operating in related industries.

Place and Duration of Study: The study is situated within the Indonesia Stock Exchange context, using recent geopolitical developments as the underlying phenomenon.

Methodology: This study employs a qualitative conceptual approach by reviewing relevant literature and integrating theoretical perspectives to construct a comprehensive model. The framework identifies key financial indicators, including Total Asset Turnover (TATO), Cash Ratio, Debt to Equity Ratio (DER), and Price to Book Value (PBV), as channels through which geopolitical sentiment is transmitted.

Results: The study proposes that boycott sentiment exerts asymmetric effects. Affiliated firms are negatively impacted through declining asset efficiency, reduced liquidity, increased solvency risk, and lower market valuation. In contrast, substitution firms benefit from spillover consumption effects, which strengthen their financial fundamentals and enhance market valuation.

Contributions: The study concludes that geopolitical sentiment functions as a critical external risk factor influencing firm performance and valuation. It highlights managerial implications such as the importance of liquidity stress testing and cautious expansion strategies, while also recommending investors consider geopolitical risk as a screening indicator. The proposed conceptual model provides a foundation for future empirical quantitative research.

Accounting Information System and Performance of Listed Consumer Goods Firms in Nigeria

Precious Adaobi Ofoje — Fri, 22 May 2026 00:00:00 +0000

Despite the increasing adoption of accounting information systems, many listed consumer goods firms in Nigeria still face poor financial performance. Inefficient utilization and high costs of these systems have continued to affect firms’ ability to improve returns and operational efficiency. The study examined the effect of accounting information system on firm performance of listed consumer goods firms in Nigeria. The specific objective was to examine the effect of adoption of accounting information system, cost of accounting information system, amortization of accounting information system and intensity of accounting information system on the return on asset of listed consumer goods firms in Nigeria. The study was anchored on the Resource-Based View (RBV). Ex-post facto research design was adopted in the study. The population comprised a total of 20 listed consumer goods firms in Nigeria. Purposive sampling was used to determine a sample size of 15 firms. The study used secondary data which were sourced from the published annual reports of the firms over a ten year period spanning 2015-2024. Descriptive and correlational analyses were used to summarise the data. Model diagnostics was conducted using panel heteroskedasticity tests and cross-sectional dependence test. The hypotheses were tested using panel estimated generalised least squares at 5% significance level. The findings revealed that: the adoption of accounting information systems has a positive and significant effect on return on assets of listed consumer goods firms in Nigeria (β = 0.1836; p = 0.0023); the cost of accounting information systems has a negative and significant effect on return on assets of listed consumer goods firms in Nigeria (β = -0.0309; p = 0.0117); the amortization of accounting information systems has a positive but non-significant effect on return on assets of listed consumer goods firms in Nigeria (β = 0.0023; p = 0.5631); the intensity of accounting information system usage has a negative and significant effect on return on assets of listed consumer goods firms in Nigeria (β = -1.9145; p = 0.0340). In conclusion, improvements in firm performance depend not only on having accounting information system, but also on how efficiently it is financed, implemented, and integrated into the firm’s operations. The study recommends that management should accelerate the integration of AIS into core business processes and provide staff with specialized training to fully leverage its decision-support capabilities. This ensures that adoption translates into measurable performance gains.

Cost of Capital as a Deterrent to Shareholder Wealth among Listed Industrial Goods Firms in Nigeria

Charles Ndubuisi Ukoh, Gilbert Ogechukwu Nworie — Wed, 03 Jun 2026 00:00:00 +0000

The increasing cost of debt and equity financing in Nigeria’s competitive and unstable economic environment has created major challenges for listed industrial goods firms in sustaining operations and maximizing shareholder wealth. This study examined the effect of cost of capital as a deterrent of shareholder wealth among listed industrial goods firms in Nigeria. Specifically, it investigated the effect of debt capital cost (DCC) and equity capital cost (ECC) on shareholder return. Existing studies on cost of capital have produced mixed findings and focused largely on profitability and firm performance across different sectors, thereby leaving a conceptual, methodological, and sectoral gap in explaining shareholder wealth through shareholder return among listed industrial goods firms in Nigeria using cost of debt capital, cost of equity capital, firm size, and leverage. Hence, this study adopted an ex-post facto research design, and the population comprised eleven (11) listed industrial goods firms in Nigeria, from which nine (9) firms were selected as the sample. Secondary data were obtained from the audited annual financial statements of the sampled firms published on the Nigerian Exchange Group (from 2015-2024). Panel regression analysis using random effects Generalized Least Squares (GLS) with PCSE correction was employed to test the hypotheses. The findings revealed that: equity capital cost has a negative and significant effect on shareholder wealth (β = -1.559066, p = 0.0000); debt capital cost has a negative and significant effect on shareholder wealth (β = -11.41778, p = 0.0000). The study concluded that increasing capital costs, whether equity or debt-based, translate into diminished shareholder wealth by reducing profitability, constraining reinvestment capacity, and lowering valuation multiples in the capital market over time in markets. The study recommended that the board of directors and corporate financial managers should focus on strengthening firm-level fundamentals that influence investors’ required returns, in order to moderate the cost of equity financing. This can be achieved through enhanced corporate governance practices, improved transparency in financial reporting, and the adoption of consistent dividend policies that signal stability and reduce perceived investment risk.