Abstract
We examine the relationship between firms’ equity values and the announcement of price control regulations. These announcements occurred three times in New Zealand over the period 1970–1972 and differed in their content. We have partitioned firms into two subsamples based upon how they were impacted by the regulations. We argue there were differential impacts of the announcements, which were conditional on the content of the announcements and their applicability to the classes of companies we examined. Our results provide strong evidence that equity values are negatively affected by price controls and positively affected when existing price controls are removed or relaxed.
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