scholarly journals Celebrity endorsement and stock market return

2017 ◽  
Vol 35 (4) ◽  
pp. 529-543 ◽  
Author(s):  
Catherine Prentice ◽  
Lei Zhang
Keyword(s):  
Stock Market ◽  
Event Study ◽  
Relevant Literature ◽  
High Tech ◽  
Celebrity Endorsement ◽  
Financial Return ◽  
Content Type ◽  
Market Return ◽  
Stock Market Return ◽  
Event Study Method

Purpose Celebrity endorsement advertising receives increased attention in the relevant literature. Approaching from the abnormal stock market return perspective, the purpose of this paper is to investigate the potential risks and expected profit associated with celebrity endorsement. The factors that are included in this investigation are the attributes relating to celebrities and the endorsed firms. Design/methodology/approach Data were collected from over 300 firms that use celebrity endorsements and are listed in two of the biggest stock exchanges in China. The study uses the event study method to analyze the proposed relationships. Findings Some of the findings in the current study are consistent with or contrast to those in previous research. Specifically, this study finds that the celebrities’ demographics such as age and gender have little influence on financial return of the endorsed firm. However, investors respond rather negatively toward using actor celebrities to endorse a product or a brand, especially for high-tech products. The match-up endorsement has a positive effect on the firm’s abnormal return. Research limitations/implications The current study has implications for the relevant literature and practitioners. Very few studies have used stock market return to measure celebrity endorsement effectiveness. This study provides insights into the influence of various factors associating with celebrities and the endorsed firm, extending the celebrity endorsement research into a broader domain. In particular, this study has practical implications for firms that have used or intend to use actor celebrity endorsement. Originality/value This study is the first to use event study method to comprehensively analyze influence of attributes relating to both the celebrities and the endorsed firms in China on stock market return.

scholarly journals The impact of political instability driven by the Tunisian revolution on the relationship between Google search queries index and financial market dynamics

2020 ◽  
Vol 4 (1) ◽  
pp. 61-76
Author(s):  
Yousra Trichilli ◽  
Mouna Boujelbène Abbes ◽  
Sabrine Zouari
Keyword(s):  
Stock Market ◽  
Political Instability ◽  
Investor Sentiment ◽  
Wavelet Coherence ◽  
Content Type ◽  
Search Queries ◽  
Market Return ◽  
Stock Market Return ◽  
Tunisian Revolution ◽  
Google Search

PurposeThis paper examines the impact of political instability on the investors' behavior, measured by Google search queries, and on the dynamics of stock market returns.Design/methodology/approachFirst, by using the DCC-GARCH model, the authors examine the effect of investor sentiment on the Tunisian stock market return. Second, the authors employ the fully modified dynamic ordinary least square method (FMOL) to estimate the long-term relationship between investor sentiment and Tunisian stock market return. Finally, the authors use the wavelet coherence model to test the co-movement between investor sentiment measured by Google Trends and Tunisian stock market return.FindingsUsing the dynamic conditional correlation (DCC), the authors find that Google search queries index has the ability to reflect political events especially the Tunisian revolution. In addition, empirical results of fully modified ordinary least square (FMOLS) method reveal that Google search queries index has a slightly higher effect on Tunindex return after the Tunisian revolution than before this revolution. Furthermore, by employing wavelet coherence model, the authors find strong comovement between Google search queries index and return index during the period of the Tunisian revolution political instability. Moreover, in the frequency domain, strong coherence can be found in less than four months and in 16–32 months during the Tunisian revolution which show that the Google search queries measure was leading over Tunindex return. In fact, wavelet coherence analysis confirms the result of DCC that Google search queries index has the ability to detect the behavior of Tunisian investors especially during the period of political instability.Research limitations/implicationsThis study provides empirical evidence to portfolio managers that may use Google search queries index as a robust measure of investor's sentiment to select a suitable investment and to make an optimal investments decisions.Originality/valueThe important research question of how political instability affects stock market dynamics has been neglected by scholars. This paper attempts principally to fill this void by investigating the time-varying interactions between market returns, volatility and Google search based index, especially during Tunisian revolution.

scholarly journals A note on the relationship between COVID-19 and stock market return: evidence from South Asia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Md Arafat Rahman ◽  
Md Mohsan Khudri ◽  
Muhammad Kamran ◽  
Pakeezah Butt
Keyword(s):  
Stock Market ◽  
South Asian ◽  
Stock Markets ◽  
Asian Countries ◽  
Causality Test ◽  
Stock Market Returns ◽  
Content Type ◽  
Market Return ◽  
Stock Market Return ◽  
The Impact

Purpose The transformation of coronavirus disease (COVID-19) from a regional health crisis in a Chinese city to a global pandemic has caused severe damage not only to the natural and economic lives of human beings but also to the financial markets. The rapidly pervading and daunting consequences of COVID-19 spread have plummeted the stock markets to their lowest levels in many decades especially in South Asia. This concern motivates us to investigate the stock markets’ response to the COVID-19 pandemic in four South Asian countries: Bangladesh, India, Pakistan and Sri Lanka. This study aims to investigate the causal impact of the number of confirmed COVID-19 cases on stock market returns using panel data of the countries stated above. Design/methodology/approach This study collects and analyzes the daily data on COVID-19 spread and stock market return over the period May 28, 2020 to October 01, 2020. Using Dumitrescu and Hurlin panel Granger non-causality test, the empirical results demonstrate that the COVID-19 spread measured through its daily confirmed cases in a country significantly induces stock market return. This paper cross-validates the results using the pairwise Granger causality test. Findings The empirical results suggest unidirectional causality from COVID-19 to stock market returns, indicating that the spread of COVID-19 has a dominant short-term influence on the stock movements. To the best of the knowledge, this study provides the first empirical insights into the impact of COVID-19 on the stock markets of selected South Asian countries taking the cross-sectional dependence into account. The results are also in line with the findings of other existing literature on COVID-19. Moreover, the results are robust across the two tests used in this study. Originality/value The findings are equally insightful to the fund managers and investors in South Asian countries. Taking into account the possible impact of COVID-19 on stock markets’ returns, investors can design their optimal portfolios more effectively. This study has another important implication in the sense that the impact of COVID-19 on the stock markets of South Asian countries may have spillover effects on other developing or even developed countries.

Measuring the Financial Value of Marketing Strategy with Excess Stock Market Return

2014 ◽  
Vol 3 (4) ◽  
pp. 1-16
Author(s):  
Vicki Lane
Keyword(s):  
Stock Market ◽  
Marketing Strategy ◽  
Event Study ◽  
Firm Value ◽  
Cash Flows ◽  
Excess Return ◽  
Marketing Metrics ◽  
Market Return ◽  
Stock Market Return ◽  
The Impact

This paper proposes excess stock market return as a way to measure the impact of marketing strategy on firm value. First, it provides an overview of event study method. An event study examines the excess return to a firm's stock price after the release of information that is relevant to the firm's financial success. Second, it shows how excess return captures a marketing strategy's impact on firm value. It presents a model that illustrates how a marketing strategy impacts consumers, future cash flows, firm value, investor's expectations, and excess return. Third, a comparison shows that excess return stacks up well against standard marketing metrics. Excess return yields unbiased estimates, allows direct causal inference, is future oriented, includes all cash flows, accounts for opportunity costs, factors in risk, and takes into account the time value of money.

Impact of board gender diversity on firm risk

2014 ◽  
Vol 40 (8) ◽  
pp. 787-803 ◽  
Author(s):  
Mary Jane Lenard ◽  
Bing Yu ◽  
E. Anne York ◽  
Shengxiong Wu
Keyword(s):  
Stock Market ◽  
Board Of Directors ◽  
Corporate Performance ◽  
Gender Diversity ◽  
Firm Risk ◽  
Content Type ◽  
Market Return ◽  
Stock Market Return ◽  
The Board Of Directors ◽  
The Impact

Purpose – The purpose of this paper is to study gender diversity on the board of directors and the relation to risk management and corporate performance as measured by the variability of stock market return. Design/methodology/approach – The sample consists of companies from the RiskMetrics database from 2007 to 2011. This database contains information on corporate board of directors. Financial variables were collected from the Compustat database and CRSP database for the years 2005-2011. The authors then measure the effect of gender diversity on corporate performance in terms of firm risk, using the model by Cheng (2008) which measures the variability of stock market return. Findings – The study shows that more gender diversity on the board of directors impacts firm risk by contributing to lower variability of stock market return. The higher the percentage of female directors on the board, the lower the variability of corporate performance. Originality/value – The research design and findings assist in providing additional evidence about the role of women in corporate leadership positions and the association with corporate performance. The approach combines Cheng's (2008) model of stock market variability with the impact of gender diversity on the board of directors.

scholarly journals What does corporate social advocacy signal? Evidence from boycott participation decisions

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Pyemo N. Afego ◽  
Imhotep P. Alagidede
Keyword(s):  
Content Analysis ◽  
Stock Market ◽  
Event Study ◽  
Market Valuation ◽  
Social Advocacy ◽  
Content Type ◽  
Political Issues ◽  
Stock Market Valuation ◽  
Corporate Social ◽  
The Impact

PurposeThis paper explores how a firm's public stand on a social-political issue can be a salient signal of the firm's values, identity and reputation. In particular, it investigates how boycott participation–conceptualized as a cue of a corporation's stand on important social-political issues–may affect the stock market valuation of that corporation, as well as how corporations legitimise their stand on the issues.Design/methodology/approachThe authors employ a mixed-methods design that uses both qualitative techniques (content analysis) and quantitative methods (event study methodology) to examine a sample of US firms who participated in a boycott campaign that sought to call attention to issues of hate speech, misinformation and discriminatory content on social media platform Facebook.FindingsFindings from the qualitative content analysis of company statements show that firms legitimise their stand on, and participation in, the boycott by expressing altruistic values and suggesting to stakeholders that their stand aligns not only with organizational values/convictions but also with the greater social good. Importantly, the event study results show that firms who publicly announced their intention to participate in the boycott, on average, earn a statistically significant positive abnormal stock return of 2.68% in the four days immediately after their announcements.Research limitations/implicationsFindings relate to a specific case of a boycott campaign. Also, the sample size is limited and restricted to US stocks. The signalling value of corporate social advocacy actions may vary across countries due to institutional and cultural differences. Market reaction may also be different for issues that are more charged than the ones examined in this study. Therefore, future research might investigate other markets, use larger sample sizes and consider a broader range of social-political issues.Practical implicationsThe presence of significant stock price changes for firms that publicly announced their decision to side with activists on the issue of hate propaganda and misinformation offers potentially valuable insights on the timing of trades for investors and arbitrageurs. Insights from the study also provide a practical resource that can be used to inform organizations' decision-making about such issues.Social implicationsTaking the lead to push on social-political issues, such as hate propaganda, discrimination, among others, and communicating their stands in a way that speaks to their values and identity, could be rewarding for companies.Originality/valueThis study provides novel evidence on the impact that corporate stances on important social-political issues can have on stock market valuation of firms and therefore extends the existing related research which until now has focused on the impact on consumer purchasing intent and brand loyalty.

In Search of Stock Market Proxy to Calculate Systematic Risk (Beta) of Stocks in Indonesia Stock Exchange

2020 ◽  
Vol 29 (2) ◽  
pp. 80-88
Author(s):  
Mochammad Chabachib
Keyword(s):  
Stock Market ◽  
Real World ◽  
Stock Price ◽  
Price Index ◽  
Stock Exchange ◽  
The Other ◽  
Stock Index ◽  
Market Return ◽  
Stock Market Return ◽  
Stock Index Returns

The calculation of beta stock in Indonesia is still debatable to this day. Though many researchers who have used sophisticated methods mathematically, the assumptions applied in developing the methods are impossible to happen in the real world, such as the ability of stock market return the day after (lead) affects the market return today. This study was conducted to assess the stock price index in Indonesia Stock Exchange that can be used as a proxy of stock market in Indonesia. The results of this study showed that there was a gap between beta stocks counted with JCI return as a market proxy with beta stocks counted with index returns of LQ-45, SRI-KEHATI, PEFINDO-25, BISNIS-27, IDX-30 and KOMPAS-100. This study has also found that the beta counted by using KOMPAS-100 return produced the smallest standard error of the estimate (SEE) that it was more applicable compared to the other stock index returns.

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