The Effects of (Un)Expected Match Outcomes on Stock Return: A Case Study of Borussia Dortmund

2021 ◽  
Vol 16 (4) ◽  
Author(s):  
Bernd Frick ◽  
Dirk Semmelroth
Keyword(s):  
Stock Price ◽  
Theoretical Perspective ◽  
Abnormal Returns ◽  
Extended Period ◽  
Stock Company ◽  
Publicly Traded ◽  
Legal Form ◽  
Organizational Architecture ◽  
Football Industry

We analyze the nature of stock price reactions of Borussia Dortmund, the only publicly traded soccer club in Germany, following domestic league and international matches over an extended period of time. Our results suggest that abnormal returns vary with the match result, the match venue, the competition type, bookmakers’ expectations, and the importance of the Bundesliga match. Although our results confirm the evidence presented in previous studies, they are surprising insofar as the legal form of Borussia Dortmund GmbH & Co. KGaA—a mixture of a stock company (AG) and a limited partnership (KG)—is quite different from that of traditional stock companies. From a theoretical perspective, diluted property rights and a lack of managerial monitoring are the main characteristics of this legal form. However, the club managers’ career concerns and the competitive pressures of the football industry seem to compensate for these deficits in the organizational architecture.

scholarly journals On the Stock Market's Reaction to Major Railroad Accidents

2010 ◽  
Author(s):  
Thomas J. Walker ◽  
Kuntara Pukthuanthong ◽  
Sergey S. Barabanov
Keyword(s):  
Stock Price ◽  
Abnormal Returns ◽  
Publicly Traded ◽  
Cross Sectional ◽  
Illegal Behavior ◽  
Price Performance ◽  
Study Methodology ◽  
Main Determinants ◽  
Abnormal Performance ◽  
The Impact

This study examines the impact of train accidents on the stock price performance of the involved railroad companies. We employ a sample of 26 accidents involving trains operated by publicly traded U.S. and Canadian railroad companies between January 1993 and December 2003. Event study methodology is used to measure the abnormal performance of the involved railroad firms to these accidents. In addition, a series of univariate tests and cross-sectional regression analysis is employed to determine the factors that drive the abnormal returns for the firms in the sample. The magnitude of the initial price decline appears to be driven by various characteristics of both the firm and the accident itself. Specifically, there is strong evidence that suggests that one of the main determinants of the abnormal returns is expected legal liability claims against the railroads. Abnormal performance is negatively related to firm size and the number of injuries and fatalities resulting from the accident. In addition, accidents that result in hazardous material spills cause significantly larger stock price drops in the days following the event. Finally, investors appear to differentiate between accident causes. Accidents caused by reckless or illegal behavior on behalf of one or more of the railroad company's employees result in particularly large price declines. Accidents caused by mechanical failures or signal malfunctions, on the other hand, only cause small stock price drops.

Fraud and firm performance: keeping the good times (apparently) rolling

2016 ◽  
Vol 42 (2) ◽  
pp. 151-172 ◽  
Author(s):  
John D. Finnerty ◽  
Shantaram Hegde ◽  
Chris B Malone
Keyword(s):  
Firm Performance ◽  
Stock Price ◽  
Abnormal Returns ◽  
Extended Period ◽  
Securities Regulation ◽  
Superior Performance ◽  
Calendar Time ◽  
Content Type ◽  
Financial Pressure ◽  
Fama And French

Purpose – The purpose of this paper is to examine the hypothesis that a period of sustained supernormal firm performance (for up to five years before fraud commission) creates financial pressure on actors/agents so they have a propensity to behave fraudulently to keep the good times (apparently) rolling. Design/methodology/approach – Applying the Fama and French (1993) three-factor model using a range of calendar time portfolio methodologies, the authors measure abnormal drifts in stock performance in periods up to five years before alleged fraud commission dates. The authors examine a sample of 561 US firms subject to enforcement actions initiated by the Securities and Exchange Commission (SEC) and the Department of Justice (DOJ) over 1968-2009. Findings – The authors find that sustained firm-specific positive stock price performance for up to five years followed by the almost inevitable adverse shock, which eventually brings the good times to an end, generally precedes corporate fraud. Fraud occurs when firm managers engage in misconduct in a misguided attempt to keep the good times (apparently) rolling despite the negative shock. Research limitations/implications – The sample is restricted to firms with trading histories on the stock market prior to the misconduct, and to firms contained in the Federal Securities Regulation database of US firms subject to enforcement actions initiated by the SEC and the DOJ over 1968-2009. Practical implications – The desire to keep the good times rolling appears to be a very important driver of fraudulent behavior, even after controlling for the executive compensation incentive effects and business cycle effects emphasized in prior studies. The robust findings of positive abnormal returns for up to five years preceding initial fraud commission suggest that regulators and investors would be well-advised to scrutinize the behavior of firms that exhibit surprisingly persistent superior performance over an extended period. If the financial results appear too good to be true, a closer examination might just reveal that they indeed are. Social implications – While most investors generally like to see the “good times keep rolling” this pressure can create ethical dilemmas for managers. Originality/value – Unlike most other papers in this area of the literature, which concentrate on the pre-fraud disclosure, the authors investigate the firm’s performance in the pre-fraud commission period. The authors find that the commission of the alleged fraud is preceded by a sustained period of surprisingly good performance of up to five years in length. The authors believe that the paper provides empirical evidence that supports the hypothesis that a period of sustained supernormal firm performance (for up to five years before fraud commission) creates financial pressure on actors/agents so they have a propensity to behave fraudulently to keep the good times (apparently) rolling.

An Empirical Study on Efficient Market Hypothesis with reference to FMCG Sector

GIS Business ◽  
2020 ◽  
Vol 15 (1) ◽  
pp. 109-126
Author(s):  
Nitin Tanted ◽  
Prashant Mistry
Keyword(s):  
Stock Prices ◽  
Stock Price ◽  
Abnormal Returns ◽  
Weak Form ◽  
Efficient Market Hypothesis ◽  
Controversial Issues ◽  
Efficient Market ◽  
Price Movements ◽  
Run Test ◽  
Stock Price Movements

One of the highly controversial issues in the area of finance is “Efficient Market Hypothesis”. Efficient Market Hypothesis states that, “In an efficient market, all available price information is reflected in the stock prices and it is not possible to generate abnormal returns compared to other investors.” A lot of studies conducted previouslyto test the Efficient Market Hypothesis, confirmed the theory until recent years, when some academicians found it to be non-applicable in financial markets. According to them, it is possible to forecast the stock price movements using Technical Analysis. The results of various studies have been inconclusive and indefinite about the issue. This study attempted to test the efficiency of FMCG Sector stocks in India in its weak form. For the study, closing prices of top 10 stocks from Nifty FMCG index has been taken for the 5-year period ranging from 1st October 2014 to 30th September 2019. Wald-Wolfowitz Run test has been used to test the haphazard movements in the stock price movements. The results indicated that FMCG sector stocks does support the Efficient Market Hypothesis and exhibit efficiency in its weak form. Hence, it is not possible to accurately predict the price movements of these stocks.

Pure Biologics – From a Bootstrapped Boutique CRO to an Integrated Drug Discovery Public Company

2020 ◽  
Vol 7 (1) ◽  
pp. 48-63
Author(s):  
Sameer Deshmukh ◽  
Przemysław Jurek ◽  
Filip Jelen ◽  
Sabina Tabaczar ◽  
Tomasz Bakowski ◽  
...  
Keyword(s):  
Drug Discovery ◽  
Present Article ◽  
Small And Medium Enterprises ◽  
Public Funding ◽  
Corporate Management ◽  
Publicly Traded ◽  
Biopharmaceutical Company ◽  
Public Company ◽  
Medium Enterprises

The present article is a case study of a Polish biopharmaceutical company, “Pure Biologics”. The company was founded in 2010 by a group of scientists and, over the last nine years, grew substantially from just a few individuals to nearly one hundred professionals. Initially, a privately-funded civil partnership, Pure Biologics, has been transformed into a publicly-traded company. Such a transformation has been possible not only because of the expertise and growing experience of corporate management, but also the specific economic environment and substantial public funding dedicated to innovative Small and Medium Enterprises (SMEs).

The Effect of Acquirer Net Operating Losses on Acquisition Premiums and Acquirer Abnormal Returns

2019 ◽  
Vol 41 (2) ◽  
pp. 103-124
Author(s):  
Merle M. Erickson ◽  
Karen Ton ◽  
Shiing-wu Wang
Keyword(s):  
Stock Price ◽  
Abnormal Returns ◽  
Price Response ◽  
Transaction Prices ◽  
Merger Announcement ◽  
Tax Benefits

ABSTRACT This study examines whether acquirer NOL-related tax benefits generated in an acquisition are shared with the target. For a sample of 1,959 acquisitions, we find that acquisitions of profitable targets by acquirers with NOLs are associated with higher acquisition premiums than acquisitions by non-NOL acquirers. This result indicates that potential post-acquisition tax benefits from use of acquirer NOLs are shared with the target in the form of higher transaction prices. We also find that the acquirer's merger announcement stock price response is positively associated with these tax benefits, which is consistent with the conclusion that acquirers retain part of these potential tax benefits.

scholarly journals Creating and Maintaining Structural Hindrances to Criminal Justice Control – A Policy Analysis on the Normalisation of Parental Violence as a Crime in Finland

2021 ◽  
pp. 096466392110208
Author(s):  
Riikka Kotanen
Keyword(s):  
Criminal Justice ◽  
Criminal Law ◽  
Interpersonal Violence ◽  
Legal Regulation ◽  
Division Of Labour ◽  
Legal Form ◽  
Parental Violence ◽  
Control Policies ◽  
And Control

In the context of home, violence remains more accepted when committed against children than adults. Normalisation of parental violence has been documented in attitudinal surveys, professional practices, and legal regulation. For example, in many countries violent disciplining of children is the only legal form of interpersonal violence. This study explores the societal invisibility and normalisation of parental violence as a crime by analysing legislation and control policies regulating the division of labour and involvement between social welfare and criminal justice authorities. An empirical case study from Finland, where all forms of parental violence were legally prohibited in 1983, is used to elucidate the divergence between (criminal) law and control policies. The analysis demonstrates how normalisation operates at the policy-level where, within the same system of control that criminalised these acts, structural hindrances are built to prevent criminal justice interventions.

scholarly journals The Impact of COVID-19 on the Stock Price of Socially Responsible Enterprises: An Empirical Study in Taiwan Stock Market

2021 ◽  
Vol 18 (4) ◽  
pp. 1398
Author(s):  
Kuo-Jung Lee ◽  
Su-Lien Lu
Keyword(s):  
Stock Market ◽  
Stock Prices ◽  
Stock Price ◽  
Abnormal Returns ◽  
Recovery Phase ◽  
Socially Responsible ◽  
Cumulative Impact ◽  
Study Approach ◽  
Price Performance ◽  
The Impact

This study examines the impact of the COVID-19 outbreak on the Taiwan stock market and investigates whether companies with a commitment to corporate social responsibility (CSR) were less affected. This study uses a selection of companies provided by CommonWealth magazine to classify the listed companies in Taiwan as CSR and non-CSR companies. The event study approach is applied to examine the change in the stock prices of CSR companies after the first COVID-19 outbreak in Taiwan. The empirical results indicate that the stock prices of all companies generated significantly negative abnormal returns and negative cumulative abnormal returns after the outbreak. Compared with all companies and with non-CSR companies, CSR companies were less affected by the outbreak; their stock prices were relatively resistant to the fall and they recovered faster. In addition, the cumulative impact of the COVID-19 on the stock prices of CSR companies is smaller than that of non-CSR companies on both short- and long-term bases. However, the stock price performance of non-CSR companies was not weaker than that of CSR companies during times when the impact of the pandemic was lower or during the price recovery phase.

scholarly journals How Do Trade-Offs and Synergies between Ecosystem Services Change in the Long Period? The Case Study of Uxin, Inner Mongolia, China

2019 ◽  
Vol 11 (21) ◽  
pp. 6041 ◽  
Author(s):  
Zhang ◽  
Li ◽  
Buyantuev ◽  
Bao ◽  
Zhang
Keyword(s):  
Ecosystem Services ◽  
Inner Mongolia ◽  
Stepwise Regression ◽  
Driving Forces ◽  
Extended Period ◽  
Trade Offs ◽  
Development And Utilization ◽  
Long Term Trends

Ecosystem services management should often expect to deal with non-linearities due to trade-offs and synergies between ecosystem services (ES). Therefore, it is important to analyze long-term trends in ES development and utilization to understand their responses to climate change and intensification of human activities. In this paper, the region of Uxin in Inner Mongolia, China, was chosen as a case study area to describe the spatial distribution and trends of 5 ES indicators. Changes in relationships between ES and driving forces of dynamics of ES relationships were analyzed for the period 1979–2016 using a stepwise regression. We found that: the magnitude and directions in ES relationships changed during this extended period; those changes are influenced by climate factors, land use change, technological progress, and population growth.

Stock Market Reaction on Green-Bond Issue: Evidence from Indian Green-Bond Issuers

2021 ◽  
pp. 097226292110225
Author(s):  
Rakesh Kumar Verma ◽  
Rohit Bansal
Keyword(s):  
Stock Returns ◽  
Financial Institutions ◽  
Stock Price ◽  
Stock Exchange ◽  
Abnormal Returns ◽  
Developed Countries ◽  
Low Carbon ◽  
Bond Issue ◽  
The Government ◽  
The Impact

Purpose: A green bond is a financial instrument issued by governments, financial institutions and corporations to fund green projects, such as those involving renewable energy, green buildings, low carbon transport, etc. This study analyses the effect of green-bond issue announcement on the issuer’s stock price movement. It shows the reaction of the stock price after the issue of green bonds. Methodology: This study is based on secondary data. Green-bond issue dates have been collected from newspaper articles from different online sources, such as Business Standard, The Economic Times, Moneycontrol, etc. The closing prices of stocks have been taken from the NSE (National Stock Exchange of India Limited) website. An event window of 21 days has been fixed for the study, including the 10 days before and after the issue date. Data analysis is carried out through the event study method using the R software. Calculation of abnormal returns is done using three models: mean-adjusted returns model, market-adjusted returns model and risk-adjusted returns model. Findings: The results show that the issue of green bonds has a significant positive effect on the stock price. Returns increase after the green-bond issue announcement. Although the announcement day shows a negative return for all the samples taken for the study, the 10-day cumulative abnormal return (CAR) is positive. Thus, green-bond issues lead to positive sentiments among investors. Research implications: This research article will help the government issue more green bonds so that the proceeds can be utilized for green projects. The government should motivate corporations and financial institutions to issue more green bonds to help the economy grow. In India, very few organizations have issued a green bond. It will be beneficial if these players issue green bonds, as it will increase the firms’ value and boost returns to the investors. Originality/value: The effect of green-bond issue on stock returns has been analysed in some studies in developed countries. This is the first study to examine the impact of green-bond issue on stock returns in the Indian context, to the best of our knowledge.

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