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Implications of the paracrises on the companies’ stock prices

Marko Selaković (SP Jain School of Global Management – Dubai Campus, Dubai, United Arab Emirates)
Nikolina Ljepava (College of Business Administration, American University in the Emirates, Dubai, United Arab Emirates)
Miroslav Mateev (College of Business Administration, American University in the Emirates, Dubai, United Arab Emirates)

Corporate Communications: An International Journal

ISSN: 1356-3289

Article publication date: 14 November 2019

Issue publication date: 17 February 2020

502

Abstract

Purpose

The concept of social media crisis has been consequently replaced by the term “paracrisis”. However, the economic implications of the paracrises have not been thoroughly researched by now. The purpose of this paper is to examine the potential influence of paracrisis on companies’ stock price values.

Design/methodology/approach

Secondary data analysis has been conducted to identify paracrises for the publicly listed companies and verify that there were no other market events that could affect the stock price during the observed period. Quantitative data analysis has been conducted using the event study, observing stock price values before and during the paracrisis, and the relationship between stock price oscillations and S&P 500 trends was tested.

Findings

There were no significant differences in stock price values before and during the paracrisis. Additionally, a strong correlation between S&P 500 and stock price trends has been found. Findings indicate that paracrises do not significantly impact the stock price behaviour and they should be considered as an irrelevant market event from the stock price point of view.

Originality/value

This study is the first research that examines the stock price paracrisis interdependence.

Keywords

Citation

Selaković, M., Ljepava, N. and Mateev, M. (2020), "Implications of the paracrises on the companies’ stock prices", Corporate Communications: An International Journal, Vol. 25 No. 1, pp. 3-19. https://doi.org/10.1108/CCIJ-07-2019-0080

Publisher

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Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

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