Stock Price Decline Research Articles

Understanding the impact of environmental, social, and governance incidents on food producing corporations

This study investigates the intricate relationship between Environmental, Social, and Governance-related reputational disasters and the financial performance of prominent, food-producing agricultural corporations. Results reveal a significant differential response pattern between large and small firms after ESG-related events. Large entities initially exhibit resilience with no immediate negative returns, while smaller entities face substantial, significant, and persistent stock market depreciation. Furthermore, direct interactions are identified between the depth of Corporate Social Responsibility (CSR) incorporation and the severity of stock price decline. For investors, ESG track record emerges as a critical assessment criterion. The theoretical implications extend to understanding the importance of robust ESG frameworks, not just for reputational integrity but also for financial stability. The findings emphasise corporations’ urgency to integrate forward-looking, socially responsible strategies, particularly in the agricultural sector.

Research on the Impact of Economic Policy Uncertainty and Investor Sentiment on the Growth Enterprise Market Return in China—An Empirical Study Based on TVP-SV-VAR Model

This study employs the economic policy uncertainty index to gauge the level of economic policy uncertainty in China. Utilizing textual data from the growth enterprise market internet community, we construct the growth enterprise market investor sentiment index by applying the deep learning ERNIE (Enhanced Representation through Knowledge Integration) model, thereby capturing investors’ sentiment within the growth enterprise market. The dynamic interplay between economic policy uncertainty, investor sentiment, and returns of the growth enterprise market is scrutinized via the TVP-SV-VAR (time-varying parameter stochastic volatility vector auto-regression) model, and the asymmetric response of different industries’ stock returns within the growth enterprise market to economic policy uncertainty and investor sentiment shock. The findings of this research are that economic policy uncertainty exerts a negative influence on both investor sentiment and returns of the growth enterprise market. While it may trigger a temporary decline in stock prices, the empirical evidence suggests that the impact is of short duration. The influence of investor sentiment on the growth enterprise market returns is characterized by a reversal effect, suggesting that improved sentiment may initially boost stock prices but could lead to a subsequent decline over the long term. The relationship between economic policy uncertainty, investor sentiment, and returns of the growth enterprise market is time-variant, with heightened sensitivity observed during bull markets. Lastly, the effects of economic policy uncertainty and investor sentiment on the returns of different industries within the growth enterprise market are found to be asymmetric. These conclusions contribute to the existing body of literature on the Chinese capital market, offering a deeper understanding of the complex dynamics and the factors influencing market behavior.

Exploring the nexus of oil price shocks: Impacts on financial dynamics and carbon emissions in the crude oil industry

This empirical study delves into the intricate interplay between oil price shocks (OPS) and their dual impacts on both carbon emissions and the financial performance of the crude oil industry. Utilizing a sophisticated econometric approach, the study employs a Nonlinear ARDL model to meticulously scrutinize the enduring and immediate associations between oil prices and key financial indicators such as stock prices, dividends, and profit ratios of oil exploration industries. Given the significant fiscal and ecological transformations in China during this period, the chosen factors provide a robust framework for measuring changes at both microeconomic and macroeconomic levels, contributing valuable insights to sustainable economic development strategies. Our findings elucidate a statistically significant influence of OPS on the financial performance of the oil industry, particularly in the short term. The increase in the volatility level of OPS manifests a discernible decline in stock prices and profit ratios. Intriguingly, the study further uncovers a nuanced facet of OPS, revealing a prolonged and beneficial impact on carbon emissions in the long term. More importantly, heightened oil prices serve as a catalyst, motivating oil exploration companies to intensify production and exploration activities, thereby increasing carbon emissions in a direct relationship. The implications of these findings are pivotal for policy making, underscoring the imperative for decision-makers and industry stakeholders to pivot towards cleaner, more sustainable energy sources. The research augments the ongoing discourse surrounding the intricate nexus between energy costs and carbon emissions, furnishing invaluable insights that could steer the development of policies geared towards fostering sustainability and mitigating the adverse effects of climate change.

Can Fulfilling Sports Corporate Social Responsibility Serve as an Immunity During the COVID-19 Pandemic? A Perspective From Social Capital and Corporate Financial Performance

The severe acute respiratory syndrome coronavirus 2 (COVID-19) has significantly impacted the global economy. Presently, societies and businesses are facing unprecedented environmental shifts, with the sports industry being caught in this tumultuous tide. COVID-19 has affected all sectors of the global economy, suggesting an urgent need for most enterprises to reconsider their business models. This study investigates the advantages of corporate social responsibility (CSR) engagement during the negative external events of the COVID-19 pandemic, focusing specifically on the relationship between sports CSR and corporate financial performance and risk. Its objective is to provide empirical evidence on how sports CSR activities influence firm value, especially when facing systemic risks, and determine whether engaging in sports CSR serves as an effective protective tool against stock price decline. Methodologically, this study targets 159 companies that have received the Taiwan’s iSport Corporate Award over the years, employing the event study method and regression modeling to analyze the insurance effect of executing sports CSR on corporate financial performance during the COVID-19 pandemic. By offering empirical evidence on the relationship between CSR implementation and financial performance, this study contributes to a deeper understanding of the interconnectedness between sports CSR engagement and corporate financial outcomes, further enriching research in the realm of sports finance.

The dynamic effects of oil supply shock on China: Evidence from the TVP-Proxy-VAR approach

This study examines how changes in oil supply impact oil prices and China's macroeconomy. We developed an estimator that uses OPEC's institutional characteristics and high-frequency data to identify an oil supply surprise shock. This oil supply surprise is then incorporated as an exogenous variable into a TVP Proxy VAR model to analyze the effects of oil supply shocks on China's economy. Our findings indicate that negative oil supply shocks lead to higher oil prices, which in turn cause increases in China's interest rates and inflation, a decline in stock prices, a short-term rise in exports, and a long-term decrease in industrial output. When considering time-varying model parameters, we found that periods with larger oil supply shocks have a more pronounced impact on the macroeconomy. Our research provides empirical evidence for a better understanding of the effects of energy supply fluctuations.

Impact of accounting conservatism and corporate governance on stock price breakdown in firms listed on the Palestine Stock Exchange

PurposeThis paper uses test panel data for the biggest companies listed on the boards of directors of the Palestine Stock Exchange from 2016 to 2022 and will focus on the relationship between the corporate governance index, accounting conservatism, and the comprehensive index of corporate governance.Design/methodology/approachThe relationship between corporate governance and accounting conservatism is experimentally investigated for its impact on the likelihood of stock price breakdown and decline among companies listed on the Palestine Stock Exchange between 2016 and 2022, using a mixed utilities approach.FindingsThe findings demonstrated the adverse correlation between corporate governance, accounting conservatism, and stock prices. Higher levels of corporate governance can effectively reduce the likelihood of future stock price increases, while conservative accounting policies can effectively prevent stock price collapses in these listed companies. Higher levels of corporate governance can greatly lessen the detrimental effect of accounting conservatism on the likelihood of future stock price breakdowns and declines. Both accounting conservatism and corporate governance have substitution effects in decreasing the danger of stock price collapse.Research limitations/implicationsThe limitations of the current research are that higher levels of corporate governance can significantly reduce the harmful effect of accounting conservatism on the probability of stock price breakdown and decline in the future on the study sample used, and these results cannot be generalized to all company stocks that were excluded in this study. The last research limitation is that the sample size of this study is somewhat small, and therefore the effects of the results cannot be used on all unlisted companies, and they cannot be generalized to all of these companies except only to companies listed on the Palestine Stock Exchange.Practical implicationsOur findings have interesting managerial and policy implications. Listed firms should first strengthen external audit oversight, improve the method of disclosing accounting information, and improve the system architecture to raise the level of accounting conservatism. Moreover, it is imperative to enhance and improve the ownership structure of publicly traded firms, construct a robust mechanism for replacing shareholders, fortify the duties of the board of directors, proficiently fulfil the role of independent directors, and develop and refine the internal and external framework for corporate governance.Originality/valueThis study provides insights about reducing the probability of a stock market breakdown and collapse from two sides: enhancing corporate governance, improving accounting conservatism, enhancing the reliability and integrity of disclosure, and growing the number of sustainable disclosures. These suggestions can also be used as a template for Palestine's capital market's gradual and sustainable expansion.

Risk Management and Different Financial Approaches to Reduce Business Risk

This article examines three different risk management methods: asset hedging by shorting stocks, cash flow hedging using forward contracts, and futures contracts. The article explains each method's rationale, application, advantages, and disadvantages. By presenting and explaining these methods, this study aims to help readers gain insights into their effectiveness in managing risk in different types of transactions. The content of the article supports the readers to have a better understanding and gives some strategies for risk management, and provides guidance for decision-makers to mitigate potential risks in their financial operations. Asset hedging by shorting stocks involves selling borrowed stocks in anticipation of a decline in their price, thereby offsetting the potential loss of a declining asset. This strategy allows an investor to profit from a decline in stock prices. Cash flow hedging through forward contracts involves entering into an agreement to buy or sell an asset at a pre-determined future price, thereby reducing the risk of adverse price movements and ensuring a stable cash flow. On the other hand, futures contracts are standardized agreements to buy or sell an asset at a future date, are traded on public markets, provide legal protection for both parties through financial intermediaries, and allow investors to lock in prices. While these risk management methods have obvious advantages, such as potential gains to offset the risk of asset depreciation during market downturns, protection against adverse price movements, and price stabilization, they also have inherent risks and limitations that need to be carefully considered.

IMPACT OF META VERSE ANNOUNCEMENT DATE ON STOCK PRICES

Purpose-The developing metaverse, a virtual world poised to transform online interaction, has raised an important question: how does a company's participation influence its financial standing? This study focuses on the e-commerce behemoth Amazon and its prospective entry into the metaverse. Our major goal is to determine whether a statement by Amazon on their metaverse plans causes a significant impact in their stock price. By examining past stock data with any potential metaverse announcement dates, we hope to determine whether Amazon's excitement about the metaverse translates into an actual financial benefit. This study dives deeper by examining the specifics of the announcement (assuming it occurs). Does the level of commitment and investment mentioned affect the stock price reaction? Finally, this study aims to bridge the gap between the hoopla surrounding the metaverse and its real-world ramifications for corporations such as Amazon. Approach: Event Definition: The event of interest is the particular day on which our selected companies makes a public declaration about entering the metaverse. This date will be critical to our analysis. Event Window: We'll set a timetable around the announcement date. This window will most likely consist of two parts: Estimation Window: The period preceding the announcement, we have selected 110 days, helps set a baseline for Amazon's stock price performance and eliminates the impact of unrelated market movements. Event Window: This time period, we have selected as 10 days before and after following the announcement allows us to monitor any potential changes in stock price due to metaverse news. Findings: Stock Price Change: The investigation may discover a statistically significant boost in companies stock price following a metaverse announcement. This suggests that investors reacted positively to the announcement, maybe seeing the metaverse as a new growth prospect. No Change or Negative Change: Alternatively, the investigation may discover no substantial change, or even a decline in stock price following the announcement. This could suggest investor concern about companies capacity to capitalize on the metaverse, as well as a general market correction during the event window. Impact of Announcement Specificity: The study may find that the level of depth and commitment conveyed in the announcement influences stock price movement. A more thorough and ambitious proposal may elicit a better positive response from investors. Industry-Specific Effects: The research design might be expanded to compare company's stock price movement to those of other companies in different industries following metaverse announcements. This could reveal whether particular industries have a stronger stock market reaction because of their deeper relationship to the metaverse. Limitation: For starters, the metaverse is a very new concept, so any announcement by worldwide companies may focus on future projects. This makes it difficult to estimate the long-term financial impact on the company's stock price. Furthermore, the specifics of the announcement itself (assuming it occurs) are critical. A vague announcement with few specifics may have a lower impact on the stock price than a well-defined plan with realistic investment figures. These constraints underscore the need for additional research as the metaverse and corporate participation in it evolve.

Is the Balance Sheet Expansions of the Central Banks Inadequate? The Case of Japan

The Bank of Japan has continued monetary expansion to combat deflation for over twenty years. However, in March 2024, the Bank raised the negative policy interest rate that had lasted eight years and two months. From now on, the Bank should cope with huge balance sheet expansion. Although yield curve control (YCC) has been abolished, long-term interest rates will continue to be controlled to some degree since the Bank will continue to purchase long-term government bonds. New purchases of exchange-traded funds (ETFs) have been completed, but the main measures of normalization, such as removing ETFs from the huge balance sheet, will not be implemented easily because of increasing risk of stock prices decreasing. Consequently, there will be some possibilities to lead to a rise in long-term interest rates, a strong yen (a decrease in exports), and also to a decline in stock prices. Empirical analyses are conducted to examine the effects of monetary expansion and the results are positive, however, this study emphasizes the importance of the credibility of central banks.

International monetary spillovers to frontier financial markets: Evidence from Bangladesh

AbstractThis paper investigates international monetary spillovers to stock prices in Bangladesh, a frontier market that has been excluded from prior studies in the literature. Using daily stock price data for over 300 publicly traded firms in a high‐frequency event study framework, we find that contractionary monetary shocks originating from the US, euro area, and China lower stock prices, with Chinese monetary shocks having the largest impact. Contractionary shocks originating from India, on the other hand, lead to a statistically significant increase in stock returns. The positive response is driven by a small number of policy decisions. When these outlier decisions are removed from the sample, contractionary Indian monetary shocks lead to a decline in stock prices in line with spillovers from the other countries.

Analisis Fundamental, Dividen, dan Overconfidence: Sebuah Pengambilan Keputusan Investasi Saham

The COVID-19 pandemic that has occurred since December 2019 resulted the decline in stock prices, including the IDX. Fundamental Analysis (FA) describes the condition of a company in terms of profits generated by the company. Dividends (DVD) are profit sharing given to shareholders based on the number of shares owned. Overconfidence (OCF) can lead to individual behavioral tendencies to believe more in the knowledge they have. this research aims to analyze the effect of FA, DCD, and OCF on Investment Decisions Making (IDM). The results show that DVD and OVC affect IDM, but FA has no effect on IDM.

The Driving Factors of Stock Price Crash Risk

Factors that increase the likelihood of a stock market collapse are examined in this study via a review of the empirical literature. We focus on the main drivers relating to the potential for a decline in stock prices, including market factors, variables unique to the company, and those industry- and country-wide factors. Our findings suggest a multi-faceted phenomenon linked to the potential fall of stock prices. Market parameters, including liquidity, market capitalization, and volatility, influence the likelihood of a stock price fall.Similarly, firm-specific factors, such as leverage, leverage ratio, and firm size, significantly impact stock price crash risk. Finally, macroeconomic factors, such as GDP growth, inflation rate, and exchange rate, are also important factors that might cause a stock market meltdown. In conclusion, the danger of a fall in stock prices is influenced by various circumstances and is a complicated and multi-faceted phenomenon.

The interplay of internal and external factors on corporate performance during the COVID-19 pandemic: An empirical analysis of US-listed companies

This paper investigates the interplay of internal and external factors on corporate performance during the COVID-19 pandemic, utilising the resource-based view (RBV) and system theory frameworks. The study focuses on US-listed companies and examines financial flexibility, firm size, environmental, social, and governance (ESG) scores, corporate governance, macroeconomic conditions, and industry types. Using data from over 1000 firms obtained from the Eikon Refinitiv database, the analysis covers the pandemic period (2020–2022) and extends to three years prior (2017–2019) to ensure robustness. The research identifies a negative correlation between financial flexibility and corporate performance during the pandemic. Firms with higher cash reserves and lower debt experienced less decline in stock prices and revenue shortfall, indicating the importance of maintaining financial flexibility in times of crisis.

Devaluation and stock prices

Aim: The study evaluated the causal link between exchange rate devaluation and stock prices in African stock markets within the African region, namely, Zambia, Nigeria, Uganda, Tunisia, Tanzania, Botswana, Indonesia, Egypt, South Africa, and Malaysia. Research method: The Toda-Yamamoto (T-Y) Granger causality methodology which entails a determination of maximum order of integration, determination of optimal lag length, and finally conducting the T-Y causality test based on augmented var k + dmax was used in the study. We also deployed the ARDL model to estimate the effects of devaluation on stock prices in Africa. To accommodate issues of endogeneity, we further implemented dynamic panel model estimation to unravel the true effects of exchange rate devaluation on stock prices. Findings: Currency devaluation and the consumer prices negatively impacted stock prices by 3.6% and 3.2% respectively in the short term period following a 1% rise in devaluation and consumer prices. In the long-term period, a 1% rise in currency devaluation and consumer price level stimulated 1.45% and 0.68% reductions in stock prices respectively in ten developing African countries. The lending interest rate also significantly and positively impacted stock market prices over the long-term period by 0.25% following a 1% rise in lending rate, whereas, in the short-term period, a 1% rise in lending rate stimulated 0.38% decline in stock prices of the ten African countries. Originality: in this research, we executed the Toda-Yamamoto granger causality methodology in explaining the causal relation between exchange rate devaluation and stock prices in ten developing African countries and with the ARDL model, the study estimated the effects of devaluation on stock prices in Africa. Contributions: The research is a contribution to a remarkable long-run connection linking stock market price, exchange rate and price index. Though there was a remarkable long-term association linking them, the outcome also showed an essential short-run relationship linking stock market price, consumer price index and interest rate. Limitations: This research is limited to ten countries within the African region. This choice of countries was made on basis of the available data. Hence, data could be sought on additional developing countries and estimation done for a larger sample of countries to obtain results that can be used to generalize the causality between devaluation and stock price movements.

The Influence of the Federal Reserve System Interest Rate Hike on Tesla: Empirical Research Based on ARIMA Model

On 23 March 2022, the Federal Reserve System announced interest rate hikes and increased 25 basis points. After that, a series of negative monetary policies were carried out. Tesla CEO stated that the price of cars must be reduced when interest rates rose sharply. This means that Tesla's stock price will continue to decrease. The 25 -basis points raised the rate of interest rates and the highest interest rate reached 5 % to respond to inflation. The rate hikes of The Federal Reserve System have a great impact on the world. This article selected all stock data from Tesla from the listing to August this year (including daily data, weekly data, and monthly data) and uses ARIMA model to model and analyses the data. It will compare with the actual value of the Federal Reserve System. According to the study, the trend of the decline in stock prices after the RECERAL Reserve System raised interest rates is the same as the trend of research prediction in this article. Its interest rate hikes will cause Tesla's stock price to fall.

DYNAMIC PANEL DATA GENERALIZED METHOD OF MOMENT ARELLANO-BOND APPROACH IN ECONOMETRIC MODEL RETURN ON ASSETS OF PHARMACEUTICAL COMPANIES

The impact of the Covid-19 pandemic has resulted in a significant decline in the pharmaceutical sector's stock price, so investors are hesitant to invest in the pharmaceutical sub-sector. This study aims to apply dynamic panel data regression analysis with the Arellano-Bond Generalized Method of Moment (GMM) approach to model the profitability of pharmaceutical sub-sector companies on the Indonesia stock exchange. Therefore, investors need to know the profitability of the pharmaceutical sub-sector to make an investment decision. This research will produce a profitability model for pharmaceutical sub-sector companies. The data in this study was obtained from observations of stock price movements of pharmaceutical sub-sector companies listed on the Indonesia Stock Exchange (IDX) in 2013-2022. From the resulting model, it is hoped that it can provide an overview for investors to take action to invest in shares of the pharmaceutical sub-sector. The study results show that the model meets the consistency of parameters based on the results of the Arellano-Bond test and valid instruments based on the results of the Sargan test. The t-test results show that the previous period's ROA has a positive and significant influence on ROA, CR has a negative and significant influence on ROA, DR has no significant effect on ROA, and inflation has a positive and significant effect on ROA. So, the variables that significantly affect ROA are the ROA of the previous period, CR, and inflation. Based on the study's results, investors must choose companies with a higher ROA value compared to the ROA of the previous year. And choose a company that has a low CR value.

ESG and CEO turnover around the world

We investigate whether CEOs around the world are held accountable for stakeholder-related corporate misbehavior. The likelihood of CEO turnover increases significantly when the media coverage of the ESG incidents reaches extreme levels. CEO turnovers occur even in the cases where an incident does not lead to a stock price decline. In such cases, the board likely has a non-pecuniary motive for the turnover. This suggests that such non-pecuniary reputational concerns are an important determinant of CEO turnover decisions around the world, especially when the firm is facing intense public pressure due to stakeholder-related corporate misbehavior. This effect is more pronounced when firms are headquartered in stakeholder-oriented countries like many European countries.

NAVIGATING THE FINANCIAL LANDSCAPE: Analyzing Stock Returns in the Face of Inflation, Interest Rates, and Investment Risk

The decline in stock price has an impact on reducing the results received by shareholders. The purpose of this study is to determine and analyze how the influence of inflation, interest rates, and investment risk on stock yields, with financial performance as a factor that also plays a role, in companies engaged in the food and beverage sector from 2017 to 2021. This study used a descriptive method that looks for relationships between variables, using existing data. To analyze the data, panel data analysis and Eviews 12 software are used. A total of 54 food and beverage companies were the focus of this study, which were listed on the Indonesia Stock Exchange during the period. Sampling is carried out by selected sample method, by purposive sampling. A total of 11 companies were selected as samples in this study. The test results show that together, i.e. simultaneously, inflation, interest rates, investment risk, and financial performance have a significant impact on the stock yield of these companies.

Analysis of the Reorganization of ST Zhangzi Island

As a matter of fact, ST Zhangzi Island is a Chinese company primarily engaged in marine aquaculture. However, in recent years, the companys stock price has fallen, and it has faced lots of difficulties from the perspectives of operation, financing as well as fraud. One of the main reasons leading to the decline in the companys stock price and its difficulties is its financial problems. This study provides an in-depth analysis of ST Zhangzi Island s financial situation. According to the analysis, it is found that the company has a large amount of inventory backlog and overdue payments. Additionally, there are certain issues in terms of equity structure and internal monitoring. Through a thorough study and analysis of this case, this research summarizes the lessons learned from its restructuring, providing reference and guidance for similar situations in other companies. Overall, these results shed light on guiding further exploration in terms of similar cases in different industries.

DAMPAK PERANG ISRAEL-HAMAS TERHADAP HARGA SAHAM DAN MINAT BELI MASYARAKAT PRODUK PENDUKUNG ISRAEL

The Israel-Hamas war became a public concern because of acts of violence and genocide in Palestine, public criticism paid special attention to share prices and people's interest in purchasing products supporting Israel. The research here aims to determine the decline in stock prices before the Israeli military aggression and after the military aggression, namely on September 1, 2023 and November 1, 2023. The research uses mixed methods because consists of quantitative and qualitative. Researchers used quantitative methods selected 30 companies from America, France, Germany, France, England and Switzerland whose products are popularly used by Indonesian people and competitors for local Indonesian products. The qualitative method was measured by distributing questionnaires using Google Form which is 60 selected respondents from generation Z and the Millennial generation in the city of Bandung by aged 25-35. The research results show that the Israel-Hamas war had an impact on decreasing stock prices. The Israel-Hamas war has an impact on interest in purchasing products who’s supporting Israel.