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Shock events and corporate announcements

Marco Ferretti (Department of Management and Quantitative Studies, University Parthenope of Naples, Naples, Italy)
Giorgia Profumo (Department of Economics and Management, Università degli Studi di Genova, Italy.)
Ilaria Tutore (Department of Business Management Università degli Studi di Napoli “Parthenope”, Napoli, Italy.)

Journal of Communication Management

ISSN: 1363-254X

Article publication date: 2 February 2015




The purpose of this paper is to verify if, in case of a shock event, there are types of corporate announcement that may influence stock price behaviour better than others. The authors also try to determine if the communication strategy may be affected by the type of shock event.


Using the event study analysis, the authors estimate the Cumulative Abnormal Returns associated to the stocks of the selected firms hit by a shock event, in order to visualise the effectiveness of different types of corporate announcements after the event.


The research confirms the negative effect of shock events on corporate stocks’ value. Moreover, the study envisages that financial market rewards companies that assume consistent and reassuring announcements during the event window. The authors also find that the effectiveness of corporate announcements is related to the shock’s typology.

Research limitations/implications

The study employs a small and unbalanced sample of shock events. Moreover, it does not exist a generally accepted criterion to define and classify corporate announcements and the authors cannot exclude the influence of the media in the categorisation process of the announcements.

Practical implications

Since shock events may threat firms’ survival, by knowing which response strategy fits better a shock situation, a manager can assess the potential effect of his communication options and choose the right type of announcement.


There is a lack of literature on this theme, in particular on the effects that the different corporate announcements following a shock event may have on shareholders’ value.



Ferretti, M., Profumo, G. and Tutore, I. (2015), "Shock events and corporate announcements", Journal of Communication Management, Vol. 19 No. 1, pp. 81-101.



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