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This study examines the influence of Investor Attention, as reflected by Google Search Volume (GSV), on the performance metrics of firms—specifically Return (RET) and Stock Liquidity (LIQ)—within Publicly Listed Companies (PLCs) listed on the Jakarta Islamic Index (JII) of the Indonesia Stock Exchange (IDX). The investigation addresses a significant gap in the existing literature by focusing on Sharia-compliant investments within emerging markets, where the interplay between internet-fuelled investor behaviour and market outcomes remains underexplored. This gap is particularly relevant given Indonesia's rapid internet adoption rates and the burgeoning interest in Sharia-compliant financial products. Incorporating a comprehensive set of macroeconomic variables, this research provides a nuanced analysis of how broader economic conditions interact with firm performance in the context of Islamic finance. The methodological approach utilizes panel regression analysis on a robust dataset comprising 792 firm-month-year observations across 11 PLCs from January 2015 to December 2020. This period was chosen to capture the dynamic shifts in market conditions, offering a timely insight into the responsiveness of Sharia-compliant firms to global economic disruptions. Empirical findings reveal a nuanced landscape of influences: while Investor Attention does not significantly correlate with RET in relation to interest rates, it does exhibit a strong positive association with LIQ. Furthermore, the analysis highlights significant adverse effects of inflation and exchange rates on RET, underscoring the sensitivity of Sharia-compliant investments to specific macroeconomic stresses. These results contribute novel insights into the differential impact of economic factors on the returns and liquidity of firms within the JII, challenging prevailing assumptions in the field of Islamic finance. The study's implications extend beyond academia to practical applications for investors, policymakers, and industry practitioners. It elucidates the importance of leveraging internet-based metrics like GSV to gauge investor sentiment and its subsequent impact on market performance. Additionally, the findings advocate for enhanced monitoring and adaptive strategies in managing Sharia-compliant investments, particularly in volatile economic climates. Ultimately, this research not only fills a critical gap by linking internet-driven investor behaviour with financial performance in Sharia markets but also paves the way for more informed decision-making in the burgeoning sector of Islamic finance.
Usman et al. (Mon,) studied this question.