The Stock Market Reaction to Plant Closings

Abstract

This paper is an event time study of the valuation effects of a sample of eighty‐two permanent plant closings. The traditional approach to project termination decisions suggests that common stock prices should increase around the date on which firms publicly announce the termination of a project. However, the empirical results of this study indicate that, on average, no significant changes in share holder wealth are associated with the closing down of capital assets.

Citation

Cox, R.A.K., Kleiman, R.T. and Mitchell, J.B. (1993), "The Stock Market Reaction to Plant Closings", American Journal of Business, Vol. 8 No. 1, pp. 57-60. https://doi.org/10.1108/19355181199300009