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Article
Publication date: 19 February 2024

Tchai Tavor

This research investigates Airbnb’s financial implications in emerging economies and their potential to influence stock market profitability.

Abstract

Purpose

This research investigates Airbnb’s financial implications in emerging economies and their potential to influence stock market profitability.

Design/methodology/approach

Employing a multifaceted approach, the study combines parametric and nonparametric tests, robustness checks, and regression analysis to assess the impact of Airbnb’s announcements on emerging economy stock markets.

Findings

Airbnb’s announcements affect emerging economies' stock markets with a distinct pattern of cumulative abnormal returns (CAR): negative before the announcement and positive afterward. Informed investors strategically leverage this opportunity through short selling before the announcement and acquiring positions following it. Regression analysis validates these trends, revealing that stock index returns and inbound tourism affect CAR before announcements, while GDP growth influences CAR afterward. Announcements pertaining to emerging economies exert a more pronounced impact on stock indices compared to city-specific announcements, with COVID-19 period announcements demonstrating greater significance in abnormal returns than non-COVID-19 period announcements.

Originality/value

This study advances existing literature through a comprehensive range of statistical tests, differentiation between emerging countries and cities, introduction of five macroeconomic variables, and reliance on credible primary Airbnb data. It highlights the potential for investors to leverage Airbnb announcements in emerging markets for stock market profits, emphasizing the need for adaptive investment strategies considering broader macroeconomic factors.

Details

International Journal of Emerging Markets, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 8 December 2023

Weihua Liu, Tingting Liu, Ou Tang, Paul Tae Woo Lee and Zhixuan Chen

Using social network theory (SNT), this study empirically examines the impact of digital supply chain announcements disclosing corporate social responsibility (CSR) information on…

Abstract

Purpose

Using social network theory (SNT), this study empirically examines the impact of digital supply chain announcements disclosing corporate social responsibility (CSR) information on stock market value.

Design/methodology/approach

Based on 172 digital supply chain announcements disclosing CSR information from Chinese A-share listed companies, this study uses event study method to test the hypotheses.

Findings

First, digital supply chain announcements disclosing CSR information generate positive and significant market reactions, which is timely. Second, strategic CSR and value-based CSR disclosed in digital supply chain announcements have a more positive impact on stock market, however there is no significant difference when the CSR orientation is either towards internal or external stakeholders. Third, in terms of digital supply chain network characteristics, announcements reflecting higher relationship embeddedness and higher digital breadth and depth lead to more positive increases of stock value.

Originality/value

First, the authors consider the value of CSR information in digital supply chain announcements, using an event study approach to fill the gap in the related area. This study is the first examination of the joint impact of digital supply chain and CSR on market reactions. Second, compared to the previous studies on the single dimension of digital supply chain technology application, the authors innovatively consider supply chain network relationship and network structure based on social network theory and integrate several factors that may affect the market reaction. This study improves the understanding of the mechanism between digital supply chain announcements disclosing CSR information and stock market, and informs future research.

Details

Industrial Management & Data Systems, vol. 124 no. 2
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 5 September 2023

Weihua Liu, Zhixuan Chen, Tsan-Ming Choi, Paul Tae-Woo Lee, Hing Kai Chan and Yongzheng Gao

This study aims to explore the impact of carbon neutral announcements on “stock market value” of publicly listed companies in China.

446

Abstract

Purpose

This study aims to explore the impact of carbon neutral announcements on “stock market value” of publicly listed companies in China.

Design/methodology/approach

The event study approach is adopted. Market, market-adjusted, Carhart four-factor model and a cross-sectional regression model are employed to examine the impacts of carbon neutral announcements on “stock market value” of Chinese companies based on data from 188 carbon neutral announcements.

Findings

Carbon neutral announcements positively impact Chinese shareholder value. Carbon neutral announcements at the strategic level have a more positive and significant impact on Chinese stock market value. Innovative carbon neutral announcements do not significantly cause Chinese stock market reactions. Companies have more positive and significant stock market reactions when the companies make carbon neutral announcements that reflect high supply chain network resilience and heterogeneity and strong supply chain network relationships.

Practical implications

The findings uncover the business value of carbon neutral activities and provide operations managers in developing countries insights into how to improve enterprises' market value by actively implementing carbon neutral activities.

Originality/value

This paper is the first trial to apply an event study to examine the relationship between carbon neutral announcements and Chinese stock market value from the perspective of announcement level and type and supply chain networks. This paper introduces corporate reputation theory and enriches the application of corporate reputation theory in the field of low-carbon environmental protections and supply chains.

Details

International Journal of Operations & Production Management, vol. 44 no. 4
Type: Research Article
ISSN: 0144-3577

Keywords

Article
Publication date: 13 March 2024

Larelle Chapple, Lien Duong and Thu Phuong Truong

The purpose of this research note is to investigate the drivers and market reaction to firms’ decision to release general COVID-19-related announcements and to withdraw earnings…

Abstract

Purpose

The purpose of this research note is to investigate the drivers and market reaction to firms’ decision to release general COVID-19-related announcements and to withdraw earnings forecasts and dividends during the COVID-19 pandemic in the continuous disclosure environment of Australia.

Design/methodology/approach

The authors first tracked the market reaction of all firms in the Australian Securities Exchange All Ordinaries, Top 300, Top 200 and Top 100 indices during the early period of the COVID-19 pandemic between 1 January and 21 September 2020. The authors then focus the investigation on the incidence of firms deciding to withdraw earnings forecasts and dividends and how the market responded to these incidences during that period.

Findings

The market reacted negatively during the March/April 2020 period but then bounced back to the pre-March 2020 level. The market reaction is mainly driven by three industries, including consumer discretionary, health care and utilities. Firms in industry sectors such as consumer discretionary, materials, health care and information technology contribute to the highest percentage of COVID-19 announcements. It is interesting to document that firms issuing COVID-19 announcements and withdrawing earnings forecasts and dividends tend to be larger firms with stronger financial performance and higher financial leverage. Regarding the stock market reaction, while the market generally reacted positively to COVID-19-related announcements, the decision to withdraw earnings forecasts and dividends is significantly regarded as bad news.

Originality/value

The COVID-19 pandemic has provided a unique natural event to examine firms’ disclosure behaviour in the continuous disclosure environment of Australia during this period of extreme uncertainty. The incidences of earnings forecasts and dividend withdrawals are mainly driven by larger, better performing and higher leverage firms in the consumer discretionary, health care, materials and information technology industry sectors. The market generally reacted favourably to COVID-19-related announcements, despite a significant stock price drop during the March/April 2020 period. The findings provide important regulatory and practical implications.

Details

Pacific Accounting Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0114-0582

Keywords

Article
Publication date: 19 February 2024

Ming-Chang Wang, Yu-Feng Hsu and Hsiang-Ying Chien

This study investigates the media activities of firms issuing private equity placements and seasoned equity offerings in Taiwan, as firms have incentives to manage media coverage…

Abstract

Purpose

This study investigates the media activities of firms issuing private equity placements and seasoned equity offerings in Taiwan, as firms have incentives to manage media coverage to influence their stock prices during private equity placement.

Design/methodology/approach

We collect a corpus of news stories and transform the news into term sets based on the part of speech. Then, we refer to Cecchini et al. (2010) to classify the news terms into positive, negative, and usual categories. Next, we employ the SVM algorithm to perform the classification tasks and the term frequency method to perform the text mining task. In last, we use a multiple regression model to verify the hypotheses.

Findings

We determine that issuing firms in a private placement have substantially more positive news stories and fewer negative news stories than those in public offerings. Furthermore, we evidence that the media management effects of postequity issues are more active than those of preequity issues. Finally, our results demonstrate that the timing and content of financial media coverage among different equity issuance methods may be biased by firm management. According to previous studies, they may attempt to manipulate stock prices to increase the number of highly profitable insider stakeholders.

Originality/value

To our knowledge, this is the first study to investigate that if private placement will associate with more active media management than the public offerings. According to our results of the difference-in-means test, the public offerings market may control news coverage; however, this result is inconsistent with that of the regression results. The private placements market may also exercise media management in the “before announcement day” and “after announcement day” periods by increasing positive news and reducing negative news.

Details

Journal of Accounting Literature, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0737-4607

Keywords

Book part
Publication date: 19 February 2024

Quoc Trung Tran

As a financial policy, dividend policy significantly affects firm value. This chapter analyzes how stock prices react to dividend decisions. First, a dividend payment is an…

Abstract

As a financial policy, dividend policy significantly affects firm value. This chapter analyzes how stock prices react to dividend decisions. First, a dividend payment is an extraction of value; therefore, stock price theoretically drops by the dividend amount on the ex-dividend day. In practice, the price drop and the dividend magnitude are not equal because of tax clientele, short-term trading, and market microstructure. Investors are indifferent in trading stocks before and after stocks go ex-dividend if they obtain equal marginal benefits from the two trading times. The difference in tax rates on dividends and capital gains leads to the gap between the price drop and the dividend amount. Moreover, if transaction costs are considerable, investors have high incentives to short-sell stocks until they cannot obtain more profits. The final outcome of this short-term trading is the difference between the price drop and the dividend amount. Furthermore, market microstructure factors such as limit orders, bid-ask spread, and price discreteness also create this gap. Second, dividend announcements convey valuable information to outsiders. When firms announce increases (decreases) in dividends, their stock prices tend to increase (decrease). Third, dividend policy is negatively related to stock price volatility. This negative relationship is explained by duration effect, rate of return effect, arbitrage realization effect, and information effect. Empirical evidence for this relationship is found in many countries. Finally, dividend smoothing is also considered as a signal about firms' future earnings. Consequently, firms with stable dividends have higher market value. In other words, dividend stability has a positive effect on stock prices.

Article
Publication date: 29 December 2023

Ashu Lamba, Priti Aggarwal, Sachin Gupta and Mayank Joshipura

This paper aims to examine the impact of announcements related to 77 interventions by 46 listed Indian pharmaceutical firms during COVID-19 on the abnormal returns of the firms…

Abstract

Purpose

This paper aims to examine the impact of announcements related to 77 interventions by 46 listed Indian pharmaceutical firms during COVID-19 on the abnormal returns of the firms. The study also finds the variables which explain cumulative abnormal returns (CARs).

Design/methodology/approach

This study uses standard event methodology to compute the abnormal returns of firms announcing pharmaceutical interventions in 2020 and 2021. Besides this, the multilayer perceptron technique is applied to identify the variables that influence the CARs of the sample firms.

Findings

The results show the presence of abnormal returns of 0.64% one day before the announcement, indicating information leakage. The multilayer perceptron approach identifies five variables that explain the CARs of the sample companies, which are licensing_age, licensing_size, size, commercialization_age and approval_age.

Originality/value

The study contributes to the efficient market literature by revealing how firm-specific nonfinancial disclosures affect stock prices, especially in times of crisis like pandemics. Prior research focused on determining the effect of COVID-19 variables on abnormal returns. This is the first research to use artificial neural networks to determine which firm-specific variables and pharmaceutical interventions can influence CARs.

Details

International Journal of Pharmaceutical and Healthcare Marketing, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1750-6123

Keywords

Article
Publication date: 12 July 2022

Puja Aggarwal Gulati and Sonia Garg

This paper attempts to examine the impact of merger on the stock returns and economic value added (EVA) of acquiring firms to know if the mergers are successful corporate…

Abstract

Purpose

This paper attempts to examine the impact of merger on the stock returns and economic value added (EVA) of acquiring firms to know if the mergers are successful corporate restructuring strategies for the firms.

Design/methodology/approach

In total, 108 Indian firms are studied using paired sample t-test and Wilcoxon signed rank test for comparing the EVA of acquiring firms in short, medium and long term after merger. The effect of merger announcements on stock returns is analyzed by way of event study. An event window of −20 to +20 is taken and an estimation window of 256 (-276 -20) days is used in the study.

Findings

The authors find that mergers lead to significant improvement in the EVA of acquiring firms. However, the increase in financial performance and EVA is witnessed only in long term. The authors did not find any significant impact of merger announcement on the stock returns of acquiring firms.

Originality/value

The study is a first of study's kind, which evaluates both short-term (using event study methodology) and long-term (using EVA) impact of value addition to an acquirer after Merger & Acquisition (M&A). The study contributes to existing literature on the signaling theory of announcement of M&As and synergy gain theory of completed M&As by providing evidence from the context of an emerging market like India.

Details

International Journal of Emerging Markets, vol. 19 no. 3
Type: Research Article
ISSN: 1746-8809

Keywords

Article
Publication date: 21 March 2024

Sugandh Ahuja, Shveta Singh and Surendra Singh Yadav

The purpose of this study is to examine the differential impact of qualitative and quantitative informational signals within the merger and acquisition (M&A) press releases on…

Abstract

Purpose

The purpose of this study is to examine the differential impact of qualitative and quantitative informational signals within the merger and acquisition (M&A) press releases on deal completion and duration. A significant percentage of deals by emerging market acquirers get abandoned before completion, and those that are completed have a longer duration. The limited information about the operations of acquirers from emerging markets creates suspicion among the stakeholders involved in deal resolution, hindering the completion of deals. Thus, using the signal-feedback paradigm, authors investigate how informational signals in the M&A press release impact the deal resolution.

Design/methodology/approach

The study employs content analysis on M&A press releases announced by firms from five emerging economies: Brazil, Russia, India, China and South Africa. The technique is applied based on the exploration-exploitation framework developed by March (1991) to categorize the announced deal motives (qualitative information). Next, the authors identify the percentage of relevant quantitative information disclosed in the press release, following which results are obtained using logistic and ordinary least square regressions.

Findings

The study reports that deals with declared exploratory motives take longer to complete. Additionally, deals disclosing higher percentage of quantitative disclosure exhibit lower completion rate and increased deal duration.

Originality/value

This is the first study to provide evidence that familiarity bias impacts deal duration as relative to exploitation deals that are familiar to the stakeholders; exploratory deals take longer to conclude. Further, our analysis indicates that a greater percentage of quantitative disclosure may not always reduce information risk but rather be interpreted negatively in the form of the acquirer’s overconfidence in the deal’s potential.

Details

Review of Behavioral Finance, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1940-5979

Keywords

Article
Publication date: 9 February 2024

Rizky Yudaruddin and Dadang Lesmana

This study aims to investigate the market reaction in the real estate market to the announcement of Russia’s invasion of Ukraine.

Abstract

Purpose

This study aims to investigate the market reaction in the real estate market to the announcement of Russia’s invasion of Ukraine.

Design/methodology/approach

This study uses the event study method to assess the market reaction to the announcement that Russia is invading Ukraine. The sample in this study comprises 2,325 companies in the real estate market. We also conduct a cross-sectional analysis to determine the influence of the North Atlantic Treaty Organization (NATO) members and company characteristics on market reactions during the invasion.

Findings

The global market reacts significantly negative toward Russia’s invasion of Ukraine. This indicates that the war poses a high geopolitical risk that prompts financial markets down. The authors also demonstrate that emerging and frontier markets react significantly negative to the invasion before and after its announcement. Meanwhile, developed markets tend to react only before the invasion is announced. Furthermore, we find that the NATO members react more strongly than other markets.

Social implications

This result implies that war prompts investors to flee from the stock exchange, while the deeper the country’s involvement, the more investors worry about the risks.

Originality/value

This study is the first to discuss the market reaction to the Russian invasion of Ukrainian, specifically in the real estate market.

Details

Journal of European Real Estate Research, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1753-9269

Keywords

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