Stock splits in Indonesia lead to increased stock price volatility.
The goal of the study was to analyze how stock splits affect stock prices on the Indonesia Sharia Stock Index. The researchers looked at the movement of stock prices for 60 days around the stock split event for 7 companies. They found that stock splits can have a positive effect on stock price liquidity, as seen through abnormal return analysis. This research is important because there is limited study on stock split events in Islamic stock markets.