How Sports Sponsorship Influences a Sponsor’s Financial Performance: A Case Study from the Korea Baseball Organization

This study aims to examine the effects of sponsorship on the sponsor’s financial performance. Th is study investigates return on sponsorship (ROS) with a quantitative analysis. Nexen Tire’s title sponsorship agreement with the Heroes baseball club in the Korea Baseball Organization (KBO) in 2010 is studied. The positive effect of sponsorship on the sponsor’s Tobin’s q is confirmed by comparing the non-sponsorship period (2000‒2009) with the sponsorship period (2010‒2018). It is also shown from an event study that the sponsor experiences negative abnormal stock returns on the news of the sponsorship agreement, though this was not found to be statistically significant. Still, when the sponsee enters the postseason, positive cumulative abnormal returns are observed, particularly significant 10 days before the postseason games. Th is study confirms the positive influence of sponsorship on the sponsor’s financial performance and, with evidence from South Korea, provides insight into Asian markets in need of research. Th e results suggest that 10 days before a postseason game would be an ideal time to leverage marketing and activate a sponsorship strategy.

Studying the Effect of Changing the Managing Director on the Abnormal Returns of Shares of Companies Listed on the Iraqi Stock Exchange

The aim of this research is to study the market reaction to the change of the managing director and how this change affects the abnormal returns of the shares. The research is based on the information published by the companies listed on the Iraq Stock Exchange, and 35 companies were selected for the period from 2015 to 2019. The results of the hypothesis test for this study show that there is a negative and significant relationship between the change of the managing director and abnormal stock returns. On the other hand, investors undervalue stock prices when changing CEOs. As a result, the stock returns are less than expected.

“Red” and “green” flags of risk disclosures – identifying associations between positive and negative key phrases and consecutive cumulative abnormal stock returns

Purpose The usefulness of risk disclosures (RDs) to support equity investors’ investment decisions is highly discussed. As prior research criticizes the extensive aggregation of risk information in existing empirical research, this paper aims to provide an attempt to identify disaggregated risk information associated with cumulative abnormal stock returns (CARs). Design/methodology/approach The sample consists of 2,558 RDs of companies listed in the S&P 500 index. The RDs were filed within 10 K filings between 2011 and 2017. First, this study automatically extracted 35,685 key phrases that occurred in a maximum of 1.5% of the RDs. Second, this study performed stepwise regressions of these key phrases and identified 67 (78) key phrases that show positive (negative) associations with CARs. Findings The paper finds that investors seem to value most the more common key phrases just below the 1.5% rarest key phrase threshold and business-related key phrases from RDs. Furthermore, investors seem to perceive key phrases that contain words indicating uncertainty (impacts) as a negative (positive) rather than a positive (negative) signal. Research limitations/implications The research approach faces limitations mainly due to the selection of the included key phrases, the focus on CARs and the methodological choice of the stepwise regression analysis. Originality/value The study reveals the potential for companies to increase the information value of their RDs for equity investors by providing tailored information within RDs instead of universal phrases. In addition, the research indicates that the tailored RDs encouraged by the SEC contain relevant information for investors. Furthermore, the results may guide the attention of equity investors to relevant text passages whose deeper analysis might be useful with regard to investors’ capital market decisions.

Does Credit Rating Revisions Affect the Price of Common Stock: A Study of Indian Capital Market

The current investigation aims to assess the effect of credit assessment changes on the share prices of Indian companies from 2009 to 2019. The data of top 100 companies listed on National Stock Exchange (NSE) across 10 industries stem from CMIE databases. The excess stock return is compared with the market in a 15-day window around credit rating changes. The event effect on share prices is more in the pre-event window compared to the post-event window. Positive abnormal stock returns around upgrades through downgrades are statistically significant compared to upgrades. Credit ratings are not significant across industries, and agency nationality is a critical factor for calculating the intensity of price reaction.

Post-Earning Announcement Drift and Value-Glamour Anomalies in NSE Listed Firms

Purpose of the article: Of the various market anomalies, the Value-Glamour anomaly and Post-Earnings Announcement Drifts (PEAD) have consistently attracted the attention of researchers. Prior studies have established that the reaction of value stocks and glamour stocks to the earnings announcement differs significantly and there is a close relationship between the PEAD and abnormal returns arising due to earning announcement surprises. We have studied the drift patterns of various value and glamour portfolios and tested whether the direction of the earnings announcement abnormal return is opposite to that of earnings surprise in the Indian market.Methodology: We use the statistics of 100 firms listed on the NSE for a sample period of 2014–2018. We use a set of 1130 observations analysed using the expectations formation approach around earnings and evaluate the post earnings announcement drift. We use the Earnings Response Coefficients to find the association between abnormal stock returns and earnings surprises.Scientific aim: The aim of this research is to improve the knowledge of market anomalies in developing markets such as India focusing on the impact of earnings announcement on growth and value stocks.Findings: We find that a negative association of abnormal stock returns with surprise in accounting earnings announcements. The stocks, which are overvalued or undervalued, are properly priced after the earnings announcements. Our results refute the earlier studies evidencing the strong support in favour of market inefficiency in the Indian context, particularly with respect to publicly available earnings information.Conclusions: The Indian stock market tends to be efficient with respect to earnings announcements and therefore does not produce excessive returns. However, a heterogeneity with respect to earnings announcement may exist among the category of stocks depending upon liquidity position. Superior returns cannot be derived by traders and investors on a consistent basis from value-glamour anomaly.

Strengthen the Impact of CSR Information and Audit Quality on Investment Decisions: The Role of Good Corporate Governance in ASEAN Countries

This research contributes to the development of theories regarding the relationship between Corporate Social Responsibility (CSR) and investment decisions. Acquisition of stock returns that exceed normal predictions depends on the successful implementation of Good Corporate Governance (GCG). This study aims to examine investors' reactions to information on CSR disclosure in several countries that are members of the Association of Southeast Asian Nations (ASEAN). Furthermore, this study also examines the role of implementing GCG in strengthening the impact of CSR disclosure on investor relations as measured by abnormal stock returns. The sampling technique used was purposive Sampling. The research was conducted on Manufacturing Companies in countries that are members of ASEAN during 2017-2019. The estimation model used to analyze data is a multiple regression model. The results showed that CSR information was able to increase investors' positive reactions. Meanwhile, GCG practice is proven to strengthen the impact of CSR information on investment decisions. Other variables involved in this study, namely audit quality, company size, debt level, and sales growth, are not proven to influence abnormal stock returns.

Strengthen the Impact of CSR Information on Investment Decisions: The Role of Good Corporate Governance in ASEAN Countries

This research contributes to the development of theories regarding the relationship between Corporate Social Responsibility (CSR) and investment decisions. Acquisition of stock returns that exceed normal predictions depends on the successful implementation of Good Corporate Governance (GCG). This study aims to examine investors' reactions to information on CSR disclosure in several countries that are members of the Association of Southeast Asian Nations (ASEAN). Furthermore, this study also examines the role of implementing GCG in strengthening the impact of CSR disclosure on investor relations as measured by abnormal stock returns. The sampling technique used was purposive Sampling. The research was conducted on Manufacturing Companies in countries that are members of ASEAN during 2017-2019. The estimation model used to analyze data is a multiple regression model. The results showed that CSR information was able to increase investors' positive reactions. Meanwhile, GCG practice is proven to strengthen the impact of CSR information on investment decisions. Other variables involved in this study, namely audit quality, company size, debt level, and sales growth, are not proven to influence abnormal stock returns.

The Analysis of Abnormal Stock Returns in LQ-45 Index during Covid-19 Pandemic

This research aimed: (1) to identify the average distinction of abnormal stock-return in LQ-45 during Covid-19 Pandemic around January-May 2020 in Indonesia, and (2) to identify the highest average abnormal stock-return during Covid-19 Pandemic around January-May 2020. The research sample used LQ-45 Share through purposive sampling method. Abnormal return denotes to the indicator used to measure the market reaction due to the particular event. Kolmogorov Smirnov and Kruskal Wallis test are used to assess the normality data and examine whether there was average distinction of abnormal stock-return in LQ-45 during Covid-19 Pandemic around January-May 2020 in Indonesia. The research finding represents that there is an average distinction of abnormal stock-return in LQ-45 during Covid-19 Pandemic in Indonesia. The most significant distinction shown on March 2020 which the average abnormal return value is 71.93, decreasing from February 2020 in average value of 102.43. Based on the data analysis, it is identified 17 companies with positive abnormal return whose highest average abnormal return during the pandemic around January-May 2020 is Barito Pacific Tbk (BRPT) company in value of 0.11399140.

A study of the market reaction to CEO change

The purpose of this study is to investigate how market reacts to CEO changes and how it may lead to abnormal stock returns. The research is of retrospective character and is based on publicly available information published by listed companies in Tehran Stock Exchange during 2011-2015 taken from a sample of 102 companies. The hypotheses were tested using panel regression with fixed effects for time series and merged effects for cross sections. The results of hypothesis testing showed that there is a negative and significant relationship between CEO change and abnormal stock returns. In other words, it can be argued that at the time of CEO change, stocks are underrated by stockholders, as a result of which the estimated stock return will be lower than expected.