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This study examined the impact of the Glasgow Climate Pact on the abnormal returns of global clean energy stocks. Further, this study examines which country-specific and firm-specific variables drive the cumulative abnormal returns (CARs) of clean energy stocks.

The authors used the event study method and cross-sectional multivariate regression model. The clean energy stocks in this study are limited to 81 constituent firms of the S&P Global Clean Energy Index across 17 nations. The final sample includes 80 firms and the sample period ranges from January 26, 2021, to December 07, 2021.

The study finds that the Glasgow Climate Pact negatively affects the stock returns of clean energy firms. Moreover, the climate change performance index (CCPI) positively impacts cumulative abnormal returns (CARs), signifying that clean energy investors react positively to firms in nations with good CCPI scores. The environmental, social and governance (ESG) measure for the shorter window (−1, +1) exhibited a negative relationship with CARs. The firm-specific variables (BTM, stock liquidity, size and past returns) exhibit a negative relationship with CARs in different event windows.

The authors use the CCPI as a proxy for the stringency of environmental policies in any nation. The authors extend the existing literature by employing firm-specific variables and supporting previous findings. Their findings have policy implications for clean energy investors, policymakers and other market participants.

Climate risks impact the global financial market, so the findings have implications for global regulatory bodies. Currently, there are bankruptcy cases due to climate risks. Because financial markets must play a critical role in shifting the economy toward a green one, regulators can use the cross-sectional drivers of this study to shape policy. It is also critical for regulators to reduce stock price volatility in the event of the implementation of environmental regulations and improve environmental disclosures by publicly traded companies. Furthermore, governments are interested in researching the effects of environmental regulations to protect stakeholders' interests. These regulations significantly impact emerging markets because they lack the same solid institutional frameworks as developed markets.

The authors provide evidence that firms with better ESG scores and larger firm sizes have experienced fewer abnormal returns, as these firms have stable financial and non-financial fundamentals. This timely study on the ongoing regulatory shift in environmental policy will help investors, policymakers, firms and other stakeholders make relevant decisions.

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.

The purpose of this paper is to examine intra‐industry contagion and the following apparent violations of the efficient market hypothesis around large one‐day price decline events in individual stocks.

The paper examines daily stock returns around one‐day price declines of 10 percent or more for event stocks and their rivals. Using techniques similar to those used in Bremer and Sweeney and Cox and Peterson, the paper includes event stocks whose prices are at least $10 per share prior to the event to reduce the possible price reversal induced by bid‐ask price bounce. As is typical for the literature, the stock daily abnormal return (AR) is calculated as the difference between the actual daily stock return and the estimated stock return based on the market model estimated over a 200‐trading‐day pre‐event period [−220, −21]. Cumulative abnormal returns (CARs) for each stock are formed by aggregating the individual daily stock ARs. Denoting the large price decline event day as day 0, we examine the ARs of 41 trading days [−20,+20], the CARs for the [+1,+3] period, and the CARs for the [+4,+20] period. Cross‐sectional average ARs and CARs are calculated and tested for statistical significance. Furthermore, the paper examines whether the post‐event abnormal stock returns for the event firm and its rivals can be explained by prior event firm and industry variables.

On average, after an event, the event stock experiences a positive three‐day AR (S&P 600 stocks) followed by a 17‐day negative AR (both S&P 500 and 600 stocks). Moreover, for that 17‐day period: the rivals' stocks outperform the event firms' stocks and the event firms' returns are statistically significantly related to prior variables. The paper also finds statistically significant relationships between the prior variables and the rivals' post‐event stock returns. It provides an intra‐industry effects explanation for these results.

The paper offers insights into abnormal stock returns, for the event firm and its rivals, following the event firm's large one‐day stock price drop.

The purpose of this paper is to examine the impact of the March 28, 1979 accident at the Three Mile Island (TMI) nuclear power facility on the risk and return of General Public Utilities (TMI's owner) and other electric utilities heavily invested in nuclear power facilities. The results have implications for the returns required by investors and, therefore, on the economic viability of nuclear power for electricity generation. A recent article by Bowen, Castanias, and Daley used cumulative abnormal residual (CAR) analysis to examine the impact of the TMI accident on the electric utility industry. However, as has been shown by Larcker, Gordon, and Pinches, CAR results may be misleading due to systematic risk changes and autocorrelation in the data. Intervention analysis is proposed as an alternative to CAR analysis. This paper compares the results of a traditional cumulative abnormal residual analysis with the results of intervention analysts. It is found that the CAR analysis indicates abnormal negative returns occurred immediately after the TMI accident. However, intervention analysis shows the assumptions necessary for the CAR method to be appropriate are violated. When adjustments are made for a shift in systematic risk and autocorrelation, no abnormal returns are observed for GPU, for other utilities with nuclear facilities or for non‐nuclear utilities. These results are in conflict with those reported by BCD.

This paper investigates if investors consider legal insider trading data while making investment decisions. If any investment decision is based on insider transactions, then it will result in abnormal stock characteristics. The purpose of this paper is to investigate if insider trading affects stock characteristics like price, return and volume. The paper further investigates the effect on stock characteristics after the trade of different types of insiders and the relationship between abnormal return and abnormal volume.

The study uses the event study method to measure the abnormal price, return and volume. Two-stage least square regression is used to investigate the relationship between abnormal return and abnormal volume.

The insider trades affect price, return and volume. The results are identical for both buy and sell transactions. The trades of different types of insiders have diverse effects on stock characteristics. The trades of substantial shareholders give rise to the highest abnormal price and return, whereas the promoters' trades result in the highest abnormal volume. No relationship is detected between abnormal return and volume.

A novel method to calculate the abnormal price is proposed. The effect of trading of all types of insiders on stock characteristics is analyzed. The relationship between abnormal return and abnormal volume, after an insider trade, is investigated.

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

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.

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.

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.

This research investigates the effect of mergers and acquisition (M&A) transactions in the pharmaceutical sector. The study assesses the short-term value creation or destruction for shareholders of pharmaceutical companies involved in M&A activities on the acquiring side.

The empirical analysis is carried out by applying the event study methodology in order to define the cumulative abnormal return for each transaction observed. Then, the correlations between abnormal returns and economic metrics are determined building a multiple regression model. These metrics refers to the acquirer, target or to the deal itself.

Evidence show a short-term value creation for shareholders of pharmaceutical companies involved in M&A transactions on the acquiring side. On the one hand, the analysis suggests a negative correlation between the value creation and the acquiring firm's level of indebtedness. On the other hand, the value creation is positively correlated with target's metrics such as Return on Equity (ROE), Return on Assets (ROA) and Research and Development (R&D) intensity. Value creation is also tied to deal-specific characteristics regarding the cash used in the transaction and the comparative extent of the deal.

This analysis allows to predict returns around an announcement day considering the described indicators of value creation or destruction. M&As play a key role in the strategy implementation as reaction to exogenous shocks and endogenous needs.

This study enriches the literature of corporate finance applied to the pharmaceutical sector. Indeed, this industry is gaining increasing relevance in the M&A panorama. Thus, the related dynamics need to be assessed considering the uniqueness of the pharmaceutical sector in terms of regulation, stakeholders and social impact.

Since business competition has become more intense throughout the world, most enterprises are seeking to engage in business cooperation with other partners in order to enhance their competitive strengths. However, they do not necessarily develop mature information technologies’ (ITs) capabilities and skills internally but rather outsource them to IT providers. Therefore, the benefits received by firms which adopt the approach of business cooperation with IT providers have become an interesting issue for managers and shareholders.

This study adopted an event study methodology for apprising the short-term business value from the stock market. The authors predicted that investors will react as they receive news coverage about the strategy of business cooperation between outsourcing firms and an IT provider, International Business Machines (IBM) Corporation. The authors then collected all news coverage regarding the firms which had announced business cooperation with IBM and observed different types of abnormal returns.

On analyzing 53 announcements of cooperation with IBM from 2008 to 2016, the authors found that the announcement of business cooperation had a significantly positive influence on companies' market value.

To the best of the authors’ knowledge, this is the first study to investigate the issue for market reaction to the announcement of business cooperation with IBM.

The present study aims to examine the short-term effect of disinvestment oriented IPOs and FPOs on the stock market performance of Indian central public sector enterprises (CPSEs), which divested their equity between 2000 and 2017.

The analysis of stock price reaction is conducted for listing dates only in the case of IPOs and three different dates in the case of FPOs through the event study methodology. The three-event dates related to FPOs are public notification date (PND), issue announcement date (IAD) and price band date (PBD).

Overall empirical analysis indicates that investor sentiments are generally insignificant prior to and posts the PND (first date). The second major date of announcement that is (IAD) is new information in the market and returns are found to be significantly negative across both the periods that is before and after IAD. Thus, the analysis depicts strongly negative investor sentiments in the case of IAD. These results are further substantiated by negatively significant CAR (cumulative abnormal returns) values for both the pre and post-event windows of PBD as well.

Empirical analysis concludes that investors do not stand a chance to gain abnormal returns through initiating positions in the stocks of CPSEs during the alternative event dates analyzed.

Since the year 2000, disinvestment through public offering has gathered momentum, and this mode accounts for approximately 62% of the collective disinvestment funds generated by the government of India till now. But there have been very limited research studies on the market performance of disinvested CPSEs. This analysis provides new empirical evidence for the market reactions of retail investors in response to the sale of equity by the Indian government in CPSEs.

The purpose of this paper is to compare the short‐term trading behaviour of A shares owned by domestic investors and their dually‐traded B shares owned by foreign investors, after a period of significant price change.

Given that the fundamentals of A and B shares are the same, the paper tests the hypothesis that both types of stocks should behave homogeneously either by exhibiting a momentum behaviour or an over‐reaction pattern. The paper relates any deviations in post‐shock stock returns to the differences in the trading patterns of foreign relative to domestic investors.

While the prices of the A shares are relatively random after the event, those of the B shares carry on increasing significantly after both positive and negative shocks. This trend is more pronounced for large firms with high liquidity, in contrast to the efficient market hypothesis expectations, which suggests that any abnormal performance should be arbitraged away sooner in a frictionless (in this case liquid) market.

The paper relates these results to the high level of optimism of foreign investors, which is an under‐researched area in behaviour finance.