THE EFFECT OF BLOCK TRADE ON FIRM VALUE: IS IT PERMANENT OR NOT PERMANENT? (A STUDY ON THE INDONESIA STOCK EXCHANGE FOR THE PERIOD 2011-2018)
Block trade is a stock trade in large number and is important related to one important issue in corporate finance, namely the transfer of corporate control. The result of 267 companies listed in the Indonesia Stock Exchange over the period 2011-2018 shows that the effect of trade blocks on firm values not permanent in the short term, medium term, and long term period. Block trade does not function as an effective corporate control tool because of the transient behavior of investors involved in block trading rather than dedicated investor. The effect block trade on firm performance produces mixed results that tend to be significant on ownership concentration and stock liquidity but not significant on firm size, dividend policy, profitability, and operation efficiency. The same finding is also on firm value. Many block holders have a short time as a shareholder in the company, after which they sell their shares back.
Block Trade, Firm Value, Firm Size, Ownership Concentration, Dividend, Profitability, Operational Efficiency JEL Classification: G32, G34, G39