Blowing Smoke: A Case of Rent Extraction

2001 ◽  
Vol 19 (1) ◽  
pp. 23-38 ◽  
Author(s):  
Jeffrey Haymond
Keyword(s):  
United States ◽  
Empirical Evidence ◽  
Event Study ◽  
Tobacco Industry ◽  
The United States ◽  
Rent Extraction ◽  
Market Capitalization ◽  
Study Methodology ◽  
Political Model ◽  
Event Study Methodology

Abstract McChesney’s theory of rent extraction describes a political model of extortion. Politicians can benefit not only by creating rents, but also by extracting privately created rents. This theory is tested empirically using event study methodology for the United States national tobacco bill, debated in Congress during 1997 and 1998. The tobacco industry was threatened with punitive legislation, lost wealth (in terms of market capitalization), and ultimately no bill was passed. In McChesney’s words, money for nothing. The empirical evidence strongly supports the view that private rents were extracted with this proposed legislation.

Information Content of Dividends: Evidence from Istanbul

2010 ◽  
Vol 3 (3) ◽  
pp. 126 ◽  
Author(s):  
Ayse Altiok-Yilmaz ◽  
Elif Akben Selcuk
Keyword(s):  
Information Content ◽  
Event Study ◽  
Stock Exchange ◽  
Information Leakage ◽  
Istanbul Stock Exchange ◽  
Event Information ◽  
Study Methodology ◽  
Dividend Increases ◽  
Signaling Hypothesis ◽  
Event Study Methodology

This study investigates the market reaction to dividend change announcements at the Istanbul Stock Exchange. A sample of 184 announcements made by 46 companies during the period 2005 to 2008 is analyzed by using the event study methodology. The results suggest that the market reacts positively to dividend increases, negatively to dividend decreases and does not react when dividends are not changed, consistent with the signaling hypothesis. Also, the results show pre-event information leakage for the decreasing dividends sample.

scholarly journals Is the market swayed by press releases on corporate governance? Event study on the Eurostoxx banks

2018 ◽  
Vol 15 (3) ◽  
pp. 23-31 ◽  
Author(s):  
Marina Brogi ◽  
Valentina Lagasio
Keyword(s):  
Corporate Governance ◽  
Event Study ◽  
Stock Prices ◽  
Investment Decisions ◽  
Press Releases ◽  
European Banks ◽  
Study Methodology ◽  
The Impact ◽  
Governance Disclosure ◽  
Event Study Methodology

Are press releases on Corporate Governance price sensitive? What is the impact of Corporate Governance information on stock prices of banks? This paper addresses these questions by applying an event study methodology on 70 press releases published by the Euro area banks listed on the Eurostoxx banks Index, from 2007 to 2016. Systemic shocks are explored as well idiosyncratic ones. Our results show that investment decisions are significantly but negatively influenced by the disclosure of a press release on corporate governance as if this kind of news leads investors to perceive the banks’ prospects negatively. The best of our knowledge this is the first paper that investigates European banks press releases on corporate governance. Findings are relevant for banks’ management and their disclosure policy. Nonetheless, further research is needed to investigate differences and similarities between an area of governance disclosure and another.

scholarly journals Impact of Smoking Ban Fatwa on Indonesian Tobacco’s Company

2013 ◽  
Vol 2 (2) ◽  
pp. 76-86
Author(s):  
Gatot Soepriyanto ◽  
Paulina Santoso
Keyword(s):  
Event Study ◽  
Abnormal Returns ◽  
Tobacco Consumption ◽  
Share Price ◽  
Market Model ◽  
Smoking Ban ◽  
Muslim Population ◽  
Stock Market Return ◽  
Study Methodology ◽  
Event Study Methodology

The objective of this study is to assess the share price reactions to smoking ban fatwa on Indonesia tobacco’s company. We expect that the smoking ban fatwa in the world’s largest Muslim population will hit the tobaccos industry revenues, lower tobacco’s company profit and eventually affect the share price of those firms. We use event study methodology and standard market model to calculate abnormal returns of the tobacco’s firms related to the news of smoking ban fatwa. Our study failed to find a statistically significant effect of smoking ban fatwa on tobacco’s firm stock market return. It suggests that the investors do not see the fatwa as a factor that may control the tobacco consumption in Indonesia – thus it may not affect the tobacco’s firm revenues and profit in the future

An Examination of Audit Quality Surrounding Within-Firm Engagement Office Changes

2021 ◽  
pp. 0148558X2110596
Author(s):  
Adam J. Greiner ◽  
Julia L. Higgs ◽  
Thomas J. Smith
Keyword(s):  
United States ◽  
Knowledge Transfer ◽  
Empirical Evidence ◽  
Audit Quality ◽  
Resource Constraints ◽  
Discretionary Accruals ◽  
The United States ◽  
Primary Analysis ◽  
Quality Deterioration ◽  
Main Association

We examine the relation between within-firm office changes and audit quality in the United States. Our primary analysis documents a reduction in audit quality, measured using abnormal discretionary accruals and restatements, when the client is transferred to a smaller within-firm office (downsize effect). We are unable to find evidence that clients experience significant improvement in audit quality among transfers to a larger within-firm office (upsize effect). We then condition our sample on the change in the number of public clients of the receiving office to better understand the source of the underlying association. We find that our downsize effect is driven by offices experiencing a decrease in the number of public clients, suggesting that our main association is not entirely the result of resource constraints for the receiving office. We posit that this finding is consistent with audit quality deterioration among within-firm office changes to smaller offices driven, in part, by the receiving office’s inability to adequately overcome the knowledge transfer frictions that accompany a move to a new office. Our findings offer empirical evidence on consequences of within-firm office changes and are particularly relevant to regulators and preparers.

scholarly journals Relationship of George Floyd protests to increases in COVID-19 cases using event study methodology

2020 ◽  
Vol 42 (4) ◽  
pp. 696-697
Author(s):  
Randall Valentine ◽  
Dawn Valentine ◽  
Jimmie L Valentine
Keyword(s):  
Event Study ◽  
Infection Rate ◽  
Infection Rates ◽  
Abnormal Growth ◽  
Cdc Guidelines ◽  
Control And Prevention ◽  
Study Methodology ◽  
Relationship Of ◽  
Us Cities ◽  
Event Study Methodology

Abstract Background Protests ignited by the George Floyd incident were examined for any significant impact on COVID-19 infection rates in select US cities. Methods Eight US cities were studied in which protestors in the tens of thousands were reported. Only cities that reside in states whose stay-at-home orders had been rescinded or expired for a minimum of 30 days were included in the sample to account for impact of growth rates solely due to economies reopening. Event study methodology was used with a 30-day estimation period to examine whether growth in COVID-19 infection rates was significant. Results In the eight cities analyzed, all had positive abnormal growth in infection rate. In six of the eight cities, infection rate growth was positive and significant. Conclusions In this study, it was apparent that violations of Centers for Disease Control and Prevention (CDC)-recommended social distancing guidelines caused a significant increase in infection rates. The data suggest that to slow the spread of COVID-19, CDC guidelines must be followed in protest situations.

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