Stock Prices Of Firms Research Articles

How Does News Impact on the Stock Prices of Green Firms in Emerging Markets?

Firms around the globe have enhanced their green credentials as a means of increasing competitiveness and improving firm performance. The literature on firms and news suggests that stock prices of most firms tends to be very responsive to news items in the short-term. However, many green companies make investments or are working in industries where the payoffs are likely to be obtained more in the medium-term. There is therefore good reason to believe that the stock prices of these firms would be less responsive to daily news items. Using a database of green firms in emerging markets, the study finds that news can impact on daily returns of green companies. However, the effects of this news does not seem to be long-lasting and was not observed across the majority of firms considered.

Analysis of Financial performance affecting Stock Price on Pharmaceutical Industry

This research is conducted to analyze the influence of stock price of firms in the pharmaceutical industry as listed in the JSX using financial ratios and based on the Gordon model approach. Methodology used in this research was Gordon model to know the stocks intrinsic value from each firm, then the comparison of market stock price, and analysis using regression analysis to know which factors affect stock price and how big the influence is. This research used six research variables; ROA, ROE, payout ratio, book value per share. and debt to equity ratio. The research population was pharmaceutical companies listed on the JSX until the end of 2004. It can be concluded that ROA, ROE,book value per share, and debt to equity has a very weak influence to stock price. Only payout ratio has the significant influence to stock price of firm in the pharmaceutical industry listed on the JSX. There is significant effect from return on asset, return on equity, payout ratio, book value per share and debt toequity ratio altogether to market price of firms in pharmaceutical industry.

Market Reactions to Sport Sponsorship Announcements in Japan

This study investigates the impact of sport sponsorship announcements on the stock prices of firms listed on the first section of the Tokyo Stock Exchange. In contrast to prior studies that suffer from small sample limitations using Western data, we include a variety of sport events using long-term Japanese data. The event study analyses weakly reveal positive average market reactions to sport sponsorship announcements from 1990 to 2014. Positive market reactions are intensified when the events are held in Japan or are related to the main business of sponsors. In addition, the stock prices of rival firms react negatively to sport sponsorship announcements, revealing a sharp contrast between sponsors and rivals.

Firm Size, Commodity Price, and Interdependence Between Firm-Level Stock Prices: The Case of Norwegian Salmon Industry

This study aims to investigate the interdependence between stock prices of salmon firms listed at Oslo Stock Exchange and to evaluate how this correlation is affected by firm size and salmon commodity price. Technically, we apply the Johansen ’ s approach (Johansen, 1991) to test cointegration between stock prices and between individual stock prices and commodity price. The time path of the long-run relationship is further examined by recursive estimations. During the sample period, we fail to confirm a common stochastic trend between the stock prices of salmon firms. This can partly explained by the various responses of firm-level stock prices to the leading firm’ stock price, depending on firm size. This may also relate to the differences between salmon stock firms ’ responses to commodity price.

The Consequences of Increasing the Scope of Managerial Judgement in Accounting Standards

This paper investigates the consequences of increasing the scope of managerial judgement (ISMJ) in accounting standards via a difference‐in‐differences approach in the unique setting of China. A substantial increase in accruals‐based earnings management is found after ISMJ, in addition to a decline in real activities‐based earnings management resulting from temporarily increased sales, boosted inventory, and expense deferrals. In contrast, we find a significant increase in the relevance of accounting information. Further analysis reveals significant negative cumulative abnormal returns related to the announcement of accounting standards change over the short term. We also find a larger long‐term increase in the crash risk of the stock prices of firms that engage in more accruals‐based earnings management after ISMJ. All of these effects are more pronounced in non‐state‐owned enterprises than in state‐owned enterprises.

Bowling for Dollars

Corporate title sponsorship of college football bowl games has proliferated over the past two decades, yet little analysis has been made concerning the returns to these investments. This article examines the impact that title sponsorships have had on the stock value of the corporate sponsors. Using event study analysis, we find that there was no significant change, on average, in the stock prices following the sponsorship announcements. However, a cross-sectional analysis of changes in firm stock prices relative to corporate and bowl characteristics reveals that markets view sponsorships by large and high-tech firms negatively and major bowls positively.

Stock Market Response to the Financial Regulations in the Mortgage‐Lending Market in Korea

AbstractThis study investigates the economic impact of the financial regulations that aimed to control the housing market in Korea during the reign of late President Ro's Administration, which had diligently fought against the then speculative bubble in the Korean real‐estate market. We test for the validity of the general prediction that the financial regulations in the form of the loan‐to‐value (LTV) and debt‐to‐income (DTI) restrictions would have adverse impacts on the value of the firms operating in the mortgage‐lending industry. In this event study, we select two critical days as event dates and check whether the stock prices of the financial firms react negatively to the announcements of the regulations. Overall, the initial imposition of the DTI restrictions (i.e., the first event) adversely affects those banks that possess a relatively large number of mortgage loans in their asset portfolio. By contrast, banks that hold a small number of mortgage loans appear to benefit from the risk‐reducing effect of the DTI regulation. Subsequently, the reinforcement of the LTV and DTI rules (i.e., the second event) has negative impacts on the banks with large mortgage loans. The degree of this adverse effect is greater in the second event than in the first event (i.e., the DTI restrictions). The reinforced regulations also unfavorably affect the savings banks with large mortgage loans but to a lesser degree compared with their counterparts in the banks. Meanwhile, the reinforcement of the financial regulations has negligible impacts on the banks and the savings banks with smaller mortgage loans.

Characteristics and stock prices of firms flamed on the Internet: The evidence from Japan

In this study, we investigate the economic impact of flaming on the Internet using Japanese data. In examining the data on firms that experienced flaming between 2006 and September 2013, we establish the following three main findings. First, large firms and ones with negative net income are more likely to be flamed on the Internet. Second, flaming alone may be too weak to impact the stock prices of target firms in the short-term, although it can lower the stock price of target firms at a later period, or when newspapers report the same event. Third, the negative market reaction grows when the flaming content is serious.

Does engagement in corporate social responsibility provide strategic insurance‐like effects?

Research summary: This study examines whether the stock and bond prices of firms engaging in corporate social responsibility (CSR) can benefit from insurance‐like effects during occurrences of negative events. Our results suggest that in the face of negative events, engagement in CSR on a continuous, long‐term basis provides insurance‐like effects on both the stock and bond prices of firms. Nevertheless, the effects are found to quickly disappear following the occurrence of a second, or subsequent, negative event. Although our results clearly indicate that firms need to allocate some of their available resources to long‐term strategic CSR activities, managers must also realize that in a crisis communication, they will probably be able to use their CSR claims on one occasion only.Managerial summary: The purpose of this article is to examine whether firms engaging in corporate social responsibility (CSR) can benefit from insurance‐like effects during occurrences of negative events. We find that on the occurrence of a negative event, long‐term CSR engagement does have insurance‐like effects. We also find that these insurance‐like effects may quickly disappear following the occurrence of a second negative event. Managers of firms with a long history of CSR activities need to realize that in a crisis communication, they can probably use their claims of adherence to CSR only once. Copyright © 2015 John Wiley & Sons, Ltd.

Characteristics and Stock Prices of Firms Flamed on the Internet: The Evidence from Japan

In this study, we investigate the economic impact of flaming on the Internet using Japanese data. In examining the data on firms that experienced flaming between 2006 and September 2013, we establish the following three main findings. First, large firms and ones with negative net income are more likely to be flamed on the Internet. Second, flaming alone may be too weak to impact the stock prices of target firms in the short-term, although it can lower the stock price of target firms at a later period, or when newspapers report the same event. Third, the negative market reaction grows when the flaming content is serious.

How do Family Affairs Affect Firms Stock Price? An Application on an Exploratory Case Study

Can 'Family Affairs' influence firm's stock price? Guided by this question, we traced the case of one of the most important eyewear producer: Luxottica Group S.p.A. This paper wants to provide a new and in-depth evidence to family and firm performance relation. The main focus is on family affairs, a deeply of family involvement, and firm's stock price, a specific group of financial performance. The aim of this research is to inquire into the relation between these variables using the case study methodology. The main research question is tested through the application of a regression model of the event study. Our main findings suggest that while not planned family affairs negatively affect firm's stock price, when the entrepreneurial family is planning its own future, a neutral-positive effect is produced on firm's stock price.

Ohlson-beta model for firms with short or long cycles: the case of Mexico

The aim of this study is to analyse the Ohlson model and an extension of it, the Ohlson-beta model, for stock prices listed in the Mexican Stock Exchange (BMV). It is added the beta coefficient to the traditional Ohlson model. The econometric analysis was done using time series and panel-data cointegration methodologies. It was found that the analysis under panel-data techniques is better for the Mexican data. The results show the correct signs in the variables (for both models) but the beta is only statistically significant in the stock prices of firms with short operating cycles.

How do 'family affairs' affect firm's stock price? An application on an exploratory case study

How do 'family affairs' affect firm's stock price? An application on an exploratory case study

The Impact of Combine Level of Capital Structure and Dividend Policy on Firm Stock Price An apply study of companies listed on Amman Stock Exchange

Although a great deal of works has been done on the area of capital structure and dividend policy, there is still insufficient knowledge of how these policies affect stock prices. This shortcoming may have been originated from the separation between both policies when investigating their effect on stock prices. Based on this point, this research adopts a new technique (completely randomized design), to combine the effect of capital structure and dividend policy on stock prices rather than separating between them. The study used panel based regression analysis depending on the sample of 30 service and industrial Jordanian firms for the period of 2001-2010. The result of test hypotheses found the following; 1) dividend payout has a positive effect on firm stock prices. 2) Firm leverage has a negative effect on firm stock prices. 3) Combined level of capital structure and dividend policy has an effect on stock prices. 4) Different levels of combined level of capital structure and dividend policy affect stock prices in a different way

The Effects of Dividend Announcements on Stock Prices of Financial Firms Listed on the Ghana Stock Exchange: Data Collection Procedures

Data collection procedures remain paramount to quantitative research. However, there is a difficulty in presenting same in the research design, since the researcher is tempted to give an outline that does not directly reflect the specific research in question. This write-up focuses on the complexity of data collection during the design stage of quantitative research projects. Specifically, it gives an outline of data collection procedures for a quantitative research project titled “the Effects of Dividend Announcements on Stock Prices of Financial Firms Listed on the Ghana Stock Exchange”. The areas covered include: population description, sampling size and access to participants, selection, validation and reliability of data collection. Procedures for collecting primary and secondary data for the study are also included. The objective is to show how these concepts could be directly applied to specific researches.

The Relationship between Corporate Ownership Structure and Earnings' Quality and its Implications for Stock Prices: An Empirical Study

يهدف هذا البحث الى اختبار العلاقة بين ملکية الموسسات المالية و ملکية الإداره و جوده الأرباح المحاسبية و مدى تأثير و إنعکاس هذه العلاقة على أسعار الأسهم للشرکات المسجلة بالبورصة المصرية. وقد اوضحت نتائج البحث وجود تأثير معنوى سلبي لکل من ملکية المؤسسات المالية و ملکية الإدارة على جوده الأرباح. کما أوضحت النتائج وجود تأثير معنوي سلبي لجوده الأرباح على أسعار الأسهم. أوضحت النتائج أيضا وجود تأثير معنوي إيجابي غير مباشر لکل من ملکية المؤسسات المالية و ملکية الإدارة على أسعار الأسهم من خلال تأثيرها على جوده الأرباح Abstract:This study aims to examine the relationship between the level of institutional as well as managerial ownership and the quality of reported earnings. Besides, this study aims to address the capital market consequences of this relationship by examining its impact on the firm stock price. The results have shown that higher level of managerial ownership has a significant negative impact on the quality of reported earnings.The results have also shown that higher level institutional ownership has a significant negative impact on the quality of reported earnings. Finally, the results have shown that the level of institutional ownership as well as managerial ownership has a significant indirect positive impact on the firm stock prices through its impact on the quality of reported earnings.

Análise dos Efeitos em Mercado de Capitais Decorrentes de Fusões: O Caso BRF S.A.

Este trabalho investigou os possíveis efeitos no mercado de capitais ocorridos antes, durante e após a fusão da Sadia e Perdigão (nova BRF S.A), anunciada em 19 de maio de 2009. Para isso, relata, analisa e apresenta, através de estudo de eventos, o comportamento dos retornos extraordinários em oito eventos, selecionados em diferentes subperíodos, tanto para as duas empresas integrantes da fusão como para seus principais concorrentes de mercado. Os eventos foram divididos em: seis relacionados à fusão e aquisição (F&A) e dois não relacionados. Os resultados mais significativos estatística e economicamente foram os primeiros. Houve retornos extraordinários positivos e estatisticamente significativos tanto para empresa Sadia (adquirida) quanto para a adquirente (Perdigão), sendo que os retornos da firma adquirida foram maiores do que os retornos da empresa adquirente. Outra verificação que este estudo revelou foi que a fusão resultou em preços acionários maiores para as empresas rivais em todos os períodos analisados, apresentando retornos extraordinários positivos e significantes. Além disso, este trabalho está em linha com a hipótese de probabilidade de aquisição.

Analysts' Forecast Bias and the Mispricing of High Credit Risk Stocks

This paper investigates whether financial analysts' power to move prices arises from investors' tendency to blindly follow analyst earnings forecasts. We find that the degree of optimism or pessimism in these forecasts is predictable and leads to temporary distortions in the stock prices of firms with difficult-to-forecast earnings. For example, among stocks with poor credit quality, the quintile predicted to have the most conservative forecasts outperforms the quintile with the most optimistic forecasts by a risk-adjusted 13.2% per year. For better credit quality firms, analyst bias is unrelated to subsequent stock returns. Firms susceptible to imprecision in earnings forecasts, like those with to poor credit quality, large idiosyncratic volatility, or high forecast dispersion, are much more likely to have highly optimistic forecasts. The greater analyst optimism for these types of stocks explains their lower returns and negative alphas, and offers a behavioral explanation for the credit risk, idiosyncratic volatility, and analyst dispersion anomalies.

Stock Market Reaction to Corporate Crime: Evidence from South Korea

This paper examines the impact of corporate crime on the stock market in South Korea. Specifically, we examine the effect of crime type (white-collar vs. street crime, operational vs. financial), industry type (financial vs. industrial), business group affiliation (chaebol-affiliated vs. non-chaebol-affiliated), and corporate governance (strong vs. weak board structure index) on the relationship between corporate crime announcement and stock market reaction. We find negative reactions to stock prices around the announcements of corporate crimes but no significant difference in reactions between announcements of individual and organizational crimes. Individual white-collar crimes have a stronger negative impact on stock prices than do individual street crimes on average, while financial crimes have a significantly greater negative impact than do operational crimes in organizations. Moreover, financial sector firms are impacted more significantly by the announcement of corporate crimes than are non-financial firms. In addition, the stock prices of chaebol-affiliated firms decrease less than do those of non-chaebol-affiliated firms, and those with a higher board committee subindex seem to be influenced less by news of corporate crimes if the size control variable is excluded. Multivariate cross-sectional analyses show consistent findings after controlling for firm-specific factors, crime-type effect, and industry and year effects. The results of this study provide valuable insights because it covers several types of corporate crime, including those committed by individuals and those perpetrated by firms.

Shock Waves of Political Risk on the Stock Market: The Case of Korean Companies in the U.S.

We introduce a method to examine the effects of the U.S. news sentiments on Korean firms listed on the New York Stock Exchange (NYSE) when North Korea causes geopolitical risks to the South Korean economy. Stock prices are evaluated by market factors and return to their fundamental values in the long term. Nevertheless, external shocks such as geo-political and international risks often cause stock volatility. Using a semi-supervised machine learning approach, we classify negative and positive news from five major newspapers in the U.S. to scrutinize the degree of North Korean risk and its influence on the stock prices of Korean firms listed on the NYSE. We find that news related to North Korea have an impact on the stock volatility in the U.S. and Korea. We could detect the direct impact of political risk posed by North Korea on the NYSE, but it was weaker than their indirect effects through the Korean stock Market.