scholarly journals CEO Duality: Newspapers and Stock Market Reactions

2021 ◽  
Vol 14 (1) ◽  
pp. 35
Author(s):  
Marco Caiffa ◽  
Vincenzo Farina ◽  
Lucrezia Fattobene
Keyword(s):  
Stock Market ◽  
Financial Markets ◽  
Empirical Support ◽  
Market Reactions ◽  
Ceo Duality ◽  
Board Chair ◽  
Stock Market Reaction ◽  
Stock Market Reactions ◽  
News Sentiment ◽  
The Relationship

This study aims to investigate the unsettled issue of the relationship between CEO duality and a firm’s value through the perspective of investors’ reaction to news which mention apical directors with a single role and Board Chair CEOs. With a unique and hand-collected database of 60,805 newspaper articles, text-analysis, event-study and regression analysis methodologies were applied to capture news sentiment and study the direction and the magnitude of the stock market reaction. Results reveal that news mentioning Board Chair CEOs are negatively processed by investors, revealing a negative perception by investors about CEO duality. The study provides empirical support for the agency theory, in contrast to the stewardship theory, in the interpretation of CEO duality. It also proposes the methodology of systematically quantifying language to explore corporate governance issues and their link with financial markets.

Accounting Methods and Differential Stock Market Response to the Announcement of Earnings

1993 ◽  
Vol 8 (3) ◽  
pp. 221-246 ◽  
Author(s):  
Morton Pincus
Keyword(s):  
Stock Market ◽  
Earnings Announcements ◽  
Empirical Support ◽  
Order Effect ◽  
Cross Sectional ◽  
Market Reactions ◽  
Earnings Response Coefficients ◽  
Earnings Response ◽  
Reported Earnings ◽  
Stock Market Reactions

The objective of this study is to assess the extent to which previously documented cross-sectional differences in stock market responses to earnings announcements are associated with firms' in-place voluntary accounting method choices. The possibility that managers may manage reported earnings via the choice of accounting policies provides a motivation for the study. Some conjectures about differences in “noise” in earnings signals generated under alternative accounting methods are developed and tested by estimating firm-specific earnings response coefficients. Both individual method choices (e.g., LIFO versus FIFO) and accounting method portfolios (conservative versus liberal sets of depreciation, inventory, and investment tax credit accounting alternatives) are examined. Overall there is little empirical support for the proposition that voluntary accounting method choices have a pervasive first-order effect on stock market reactions to earnings announcements.

Managers' sexually-oriented behavior and firm performance: linking media reports to stock market reactions and legal risk

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Amy Nicole Baker ◽  
David King ◽  
Michael Nalick ◽  
Melissa Tempio ◽  
Vishal K. Gupta ◽  
...  
Keyword(s):  
Sexual Harassment ◽  
Stock Market ◽  
Market Reaction ◽  
Market Reactions ◽  
Content Type ◽  
Stock Market Reaction ◽  
Workplace Romance ◽  
Media Reports ◽  
Stock Market Reactions ◽  
The Impact

PurposeThe goal of this study is to examine the association between managers' sexually-oriented behavior in publicly traded firms and subsequent stock market reactions. Both sexual harassment and nonharassing sexually-oriented behavior (i.e. workplace romance) are associated with negative shareholder reactions. The authors also examine factors that may alter the stock market reaction and those that may reduce the risk of lawsuit in sexual harassment cases.Design/methodology/approachInformation about incidents of sexually-oriented behavior was collected from media reports and content coded. An event study with a stock market reaction was used to measure the impact of disclosed sexually-oriented behaviors. Logistic regression was used to assess the relationship between incident characteristics and sexual harassment lawsuits.FindingsDisclosure of managers' sexually-oriented behavior is associated with a negative stock market reaction. Interestingly, the reaction was not more severe for sexual harassment disclosures compared to nonharassing behavior (i.e. workplace romance). Results also suggest that terminating a manager prior to disclosure of an event is negatively related to a harassment lawsuit.Originality/valueThe authors report this as the first study to focus on the stock market reaction of sexually-oriented harassing and nonharassing behavior of managers. This work complements research that documents the negative impact of sexual harassment on individuals by demonstrating these behaviors are associated with loss and risk at an organizational level.

scholarly journals The Effect of Pension Fund Activism on the Stock Market and the Role of Media: Evidence from Korea

2020 ◽  
Vol 49 (4) ◽  
pp. 489-513
Author(s):  
Kyung Ryang Ko ◽  
Woojin Kim
Keyword(s):  
Stock Market ◽  
Media Coverage ◽  
Pension Fund ◽  
Market Response ◽  
Market Reactions ◽  
Proxy Voting ◽  
Stock Market Reaction ◽  
Voting Decisions ◽  
Stock Market Reactions

This study examines how the stock market reacts to pension fund activism. Recent changes in the Korea National Pension Service’s (NPS) voting policy present an ideal context to examine the effect of shareholder activism on stock market reactions. Using a sample of 46 firms for which the NPS pre-disclosed to veto agendas of 2019 annual shareholder meetings, this study demonstrates that the stock market reacts negatively to the NPS “vote no” announcements. The results reveal that shareholders pay attention to the negative signal the NPS’s veto announcement delivers. We also find that publicity is positively related to stock market reactions, consistent with the hypothesis that media coverage is an efficient mechanism for pension fund activism. The study further examines whether the negative stock market response is driven not by the NPS’s pre-disclosure to “vote no,” but just by the pre-disclosure. An event study is conducted using a sample of firms for which the NPS disclosed proxy voting decisions ahead of 2019 annual meetings but did not announce to veto. The results do not reveal a significant market response, suggesting that the pre-announcement itself does not affect the stock market reaction.

scholarly journals Stock Market Reactions to Auto Manufacturers’ Environmental Failures

2018 ◽  
Vol 38 (4) ◽  
pp. 364-382 ◽  
Author(s):  
Lincoln C. Wood ◽  
Jason X. Wang ◽  
Linh N. K. Duong ◽  
Torsten Reiners ◽  
Rikki Smith
Keyword(s):  
Stock Market ◽  
Unethical Behavior ◽  
Market Reaction ◽  
Environmental Stewardship ◽  
Innovative Technology ◽  
Market Reactions ◽  
Voluntary Standards ◽  
Stock Market Reaction ◽  
Environmental Failures ◽  
Stock Market Reactions

The automotive sector must meet strict regulations to increase mobility while reducing emissions to demonstrate environmental stewardship. Trust in the promise of a sustainable Fahrvergnügen was broken with recent scandals like Dieselgate denting the confidence of regulators and consumers. Overpromising on sustainable innovative technology resulted in unethical behavior, deceit, and failure to meet promised standards. We consider to what extent societal disapproval was evident in the stock market reaction to these events. We sampled 41 announcements (1984 to 2016) and observed a mean stock market reaction of -1.01%. There was no difference in the stock reaction in firms failing governmental vs. voluntary standards and more negative reactions for events following Dieselgate or when compensation was offered. The severity of the reaction to unethical misuse of environmental credentials should encourage maintaining promised environmental performances as a macromarketing strategy.

COVID-19: Stock Market Reactions to the Shock and the Stimulus

2020 ◽  
Author(s):  
Maretno Agus Harjoto ◽  
Fabrizio Rossi ◽  
John Paglia
Keyword(s):  
Stock Market ◽  
Market Reactions ◽  
Stock Market Reactions

scholarly journals Geographic Scope and Real Estate Firm Performance during the COVID-19 Pandemic

2021 ◽  
Vol 14 (7) ◽  
pp. 309
Author(s):  
Xiaoling Chu ◽  
Chiuling Lu ◽  
Desmond Tsang
Keyword(s):  
Firm Performance ◽  
Real Estate ◽  
Stock Market ◽  
Adverse Impact ◽  
Corporate Diversification ◽  
Market Reactions ◽  
Geographic Scope ◽  
The Real Estate ◽  
Real Estate Sector ◽  
Stock Market Reactions

This study examines the effect of geographic scope in mitigating the adverse impact of the COVID-19 pandemic in the real estate sector. Utilizing the Chinese setting over the two-month period in 2020 from the beginning of the outbreak to the successful containment of the spread of virus, we show that while the pandemic has negatively impacted real estate firm returns, firms with broader geographic scope and more geographically diversified property allocations have managed to better endure the crisis. We further find that firms with higher leverage report lower returns during the pandemic irrespective of their geographic scope, but larger firms can lessen the adverse impact of the pandemic only if they have adopted a more diversified strategy. Overall, our study provides novel evidence on the benefit of diversification by demonstrating the importance of geographic scope and diversification at times of crises. Specifically, we show corporate diversification could be especially useful to mitigate the negative stock market reactions resulting from the pandemic. Moreover, diversification could even become essential for larger firms that are expected by the market to be more diversified.

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