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The effect of layoff announcements on the shareholder returns of 154 firms that announced layoffs in 1993‐1994 was examined with event study methodology. As expected, the returns to these firms were negative. Further, the returns to the firms that announced layoffs for “reactive” reasons were more negative than the returns to the firms that announced layoffs for “proactive” reasons. The effect of employment guarantee announcements on the shareholder returns of 13 firms that announced employment guarantees in 1993‐1994 and on the returns of 63 firms that made similar announcements throughout the 1990 s was examined. Returns of these samples also responded negatively to the announcements. When the response to the two types of announcements was compared, however, there was no clear conclusion regarding which type of announcement drew a more negative response.

The paper aims to measure the magnitude of the event-induced return anomaly around bonus issue announcement days in Turkey for recent years. Also, by describing the information content of these announcements with the current data, the study tries to find out the factors that cause return anomaly in Borsa Istanbul when firm boards release the bonus issue decision.

The paper conducts event study methodology for detecting market anomaly around bonus issue announcements. For the pairwise comparison purpose, t-test and one-way ANOVA methods are applied to examine if abnormal returns vary according to the information content of the announcements.

Announcement returns for bonus issues from internal resources outperform the issues that are distributed from last year's net income as bonus shares. Findings indicate different return behaviour among internal resources sub-groups. Findings also suggest that investors in Turkey welcome larger-sized issues, while cumulated returns for the initial offers significantly differ from the latter issues.

Findings are limited to the Turkish equity market. Also, the Public Disclosure Platform of Turkey, which is the main data source of the study, does not provide bonus issue announcements before 2010. Therefore, the previous year's data cannot be included in the analysis.

This paper is novel in terms of considering the main resources of the bonus issue in detail to measure the announcement's impact on stock returns.

This paper aims to examine the stock return behaviour around the bonus issue announcements in eight emerging markets for 2010–2019 by addressing the signalling, cash substitution and liquidity hypotheses.

Besides using the standard event study technique to test the presence of an anomaly, country-based regression analyses are performed. Firm-specific factors are used to understand the motive behind the anomaly observed pre- and post-announcement periods. Also, the Amihud illiquidity measure examines the liquidity hypothesis, while standardized profitability and investment ratios compare the long-run operational performance of bonus issuers to test the validity of signalling.

The findings provide evidence that abnormal returns can be detected ten days before the announcement in some countries, which is a sign of information leakage. The presence of the effect continues only in two countries after the announcement is released. The size of the bonus issue is found strongly significant in most countries, while a weak relation between abnormal return and other factors is detected. Moreover, the signalling hypothesis does not hold in the sense of long-run profitability increase, while liquidity assertion is partially presented.

Due to an inadequate number of announcements in other emerging markets, the number of sample countries is limited by eight.

The research is novel regarding analyzing a wide range of emerging countries with various variables. Also, the paper is distinguished from other studies by applying multiple set of regressions under nine different event windows.

Very little is known about the effect of dividend announcements on stock prices in Nigeria, despite the country’s unique institutional environment. The purpose of this paper is, therefore, to provide empirical evidence on this issue by investigating the stock price reaction to cash dividends by companies listed on the Nigerian Stock Exchange.

Standard event study methodology, using the market model, is employed to determine the abnormal returns surrounding the cash dividend announcement date. Abnormal returns are also calculated employing the market-adjusted return model as a robustness check and to test the sensitivity of the results to β estimation. The authors also examine the interaction between cash dividends and earnings by estimating a regression model where announcement abnormal returns are a function of both dividend changes and earnings changes relative to stock price.

The study find support for the signaling hypothesis: dividend increases are associated with positive stock price reaction, while dividend decreases are associated with negative stock price reaction. Companies that do not change their dividends experience insignificant positive abnormal returns. The results also suggest that both dividends and earnings are informative, but dividends contain information beyond that contained in earnings.

The sample for the study includes only cash dividend announcements occurring without other corporate events (such as interim dividends, stock splits, stock dividends, and mergers and acquisitions) during the event study period. The small firm-year observations may limit the validity of generalizations from these conclusions.

The findings are useful to researchers, practitioners and investors interested in companies listed on the Nigerian stock market for their proper strategic decision making. In particular, the results can be used to encourage transparency and good governance practices in the Nigerian stock market.

This paper adds to the very limited research on the stock market reaction to cash dividend announcements in Nigeria; it is the first of its kind employing a unique cash dividends data.

This study seeks to analyze the differences between merger cancellations and three types of takeover failures: failures that are associated with targeted share repurchases (greenmail), failures in which the sole bidder simply withdraws the offer, and failures that are accompanied by a general share repurchase (buyback).

The paper uses event study methods and regression analysis.

The paper observes negative target stock price reactions around all types of takeover failures and merger cancellations. However, the cumulative effect of takeover attempts is positive, suggesting that even unsuccessful tender offers generate permanent gains to target firm shareholders, while the cumulative effect of canceled mergers is negative. Furthermore, the market reaction to greenmail‐induced takeover failure announcements is no worse than that of voluntary withdrawals, suggesting that greenmail may play an efficient role in mitigating the effects of takeover bid withdrawals. Finally, while bidder wealth is destroyed in takeover failures, the effect of merger cancellations on bidders is considerably more devastating.

The paper provides evidence of negative stock price reactions to all forms of merger failure. The paper also shows that the cumulative effect of all types of takeover failures is still positive: suggesting that being put into play is still beneficial overall but that canceled mergers destroy value for both targets and bidders. The paper shows that the market reaction to greenmail‐induced failure announcements is no worse than other forms of failure. Finally, while there is an immediate downturn in target prices around a failure, the negative outcome is more severe for the bidders. Thus, the market sees that there was something useful about the anticipated change in corporate control, which was lost when it failed to be completed.

This paper aims to measure investors' perception of the rights issue announcement of publicly listed companies in five stock markets of Islamic countries. Then, these firms are grouped according to their debt level to examine whether abnormal returns are different from those that are highly leveraged. Moreover, Sharīʿah compatibility of firms is checked to understand if return anomaly shows different behaviour around rights issue announcement days.

The analysis period includes the years 2010–2019, which includes 362 rights issue announcements. The event study methodology is applied to measure the level of impact that is triggered by the rights issue announcements. Hereafter, one-way ANOVA test is performed to identify whether there exists a difference among the sample groups according to their debt level.

Findings suggest that rights issue announcements cause −3.90% fall in share prices on average for the whole sample. However, negative abnormal return is found significant only in Egypt and Turkey. Individual regression analysis results suggest that an increase in debt level worsens the return anomaly only in Egypt. This refers that the rights issue announcement is perceived as less favourable for highly leveraged companies compared to others in this country. Finally, Sharīʿah-compliant companies show better performance compared to non-compliant counterparts around the event dates.

This paper is novel in evaluating market reaction during rights issue announcements in multiple Islamic countries. Also, to the best of the authors’ knowledge, this study is the first attempt to compare return behaviour of Sharīʿah-compliant and non-compliant firms around the rights issue announcements.

We investigate institutional investors’ trading behavior of acquiring firm stocks surrounding merger activities for the period 1992–2001. We label investment companies and independent investment advisors as active institutions and banks, nonbank trusts, and insurance companies as passive institutions. We analyze the trading behavior of active and passive institutions surrounding merger announcements and their eventual resolution. Our results indicate that active institutions significantly increase their holdings of acquiring firm stocks for mergers with higher announcement period abnormal return and this increase is more pronounced for stock mergers than cash mergers. Active institutions display preference for stock proposals at the merger announcement on the basis of their prior beliefs and this is explained by the “overreaction phenomenon.” However, they update their beliefs between announcement and final resolution as more information arrives into the market. Finally, active institutions appear to correct their overreaction behavior by displaying their greater preference for cash proposals as compared to stock proposals at the quarter of eventual outcome. The trading behavior of passive institutions suggests that these institutions disregard the market response of merger announcement in trading acquiring firm stocks at the announcement quarter. The passive institutions gradually update their beliefs and utilize the information released at the announcement in rebalancing their portfolios at the final resolution.

This chapter examines the impacts of scheduled announcements of 14 widely followed macroeconomic news on the corporate bond market from July 2002 to June 2017 and documents several new findings. First, good (bad) macroeconomic news tends to have a negative (positive) effect on IG bond returns and a positive (negative) effect on high-yield (HY) bond returns. Second, nonfarm payroll (NFP) appears to be the “King of announcements” for the corporate bond market. Third, while information about revisions of prior releases is incorporated into bond prices on announcement days, future revisions fail to be priced in. Fourth, the news information is thoroughly and quickly reflected in bond prices on the announcement day. Finally, corporate bond volatility increases on announcement days, whereas the Zero Lower Bound (ZLB) policy has little effect on conditional volatility.

This paper seeks to examine the long‐run financial and return performance of UK companies which are grouped according to whether or not they have changed their dividends and earnings. Prior research has been conducted using US data and they are limited to extreme dividend changes such as dividend initiations and omissions. They have also arrived at contradicting results; some report a drift in performance, while others document evidence of mean reversion in performance. The current paper hopes to resolve this conflict using data for a large sample of UK firms which disclosed more general changes in dividends and earnings.

The aims of the paper are addressed using a stock market‐based study of share price performance and a detailed analysis of company performance based on financial ratios. These analyses are conducted from five years before to five years after the announcement of dividend/earnings news.

At the time of the announcements, share returns tend to be positive (negative) where companies have increased (decreased) the dividend and earnings. There is also evidence to suggest that the stock market has anticipated some of this news in the preceding 12 months. However, the dividend/earnings news does not appear to act as a signal of long‐term future company performance; companies which cut this dividend and reported lower earnings achieved the largest excess returns over the next five years. A similar mean‐revealing pattern existed in the financial ratios. Finally, most of the future long‐term share performance was attributable to the earnings rather than to the dividend news.

The main implication of this research is that current dividend/earnings news is not a good guide to future company performance. Indeed, it is these firms which cut their dividends along with reporting a reduction of earnings which achieve excellent results over a subsequent five‐year period. Of course, there are a number of limitations with the research; it draws on data from two previous studies, looks only at the UK and does not consider sophisticated models of investors' expectations with regard to dividend and earnings information.

The main contribution of this paper is the long‐run analysis of UK company performance following joint dividend‐earnings announcements. The analysis is comprehensive in that it considers both stock market performance as well as financial ratio performance for a period of up to five years following the dividend‐earnings news. Thus, it should be of interest to most UK investors as well as to financial managers with large quoted firms. Academics will also be interested in the results since they shed some light on an existing debate in the literature.

This paper aims to empirically analyze the success of European bank mergers and acquisitions (M&As) by an analysis of the shareholder value implications of stock market reactions to announced and canceled M&As in the period from 1999 to 2015.

The analysis of a sample of 467 announced and 54 canceled European bank M&As is conducted using event study methodology. The determinants of the shareholder value creations in M&A are observed in cross-sectional regressions. The likelihood of M&As being canceled is estimated in logit regressions.

The paper finds that European bank M&As have not been successful in terms of shareholder value creation for acquiring banks, whereas targets experienced significant value gains. Abnormal returns for bidders and targets exhibit the same characteristics upon the announcement of M&As that are canceled at a later date, whereas the results for transaction cancelations deviate. Targets experience negative abnormal returns at a larger size than upon the transaction announcement. The findings for bidders are striking, as they destroy shareholder value upon the transaction cancelation, also, consequently they suffer twice. In particular, banks with higher profitability, higher efficiency and lower liquidity experience negative abnormal returns around the announcement dates. Negative abnormal returns prior to the transaction announcement and provision for loan losses increase significantly the likelihood of M&A cancelation.

This paper contributes to the literature expanding existing analyses to the shareholder value implications of canceled European bank M&As in a 17-year long time period. The findings reveal the destructive characteristics of canceled bank M&As and provide innovative insights into European capital market reaction to canceled M&As.