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How Energy Projects Improve Stock Prices
Published in Eric A. Woodroof, Albert Thumann, How to Finance Energy Managment Projects, 2021
John R. Wingender, Eric A. Woodroof
For each announcement, the firm’s name, CRSP identification number and announcement date were entered into the Eventus computer program, which tracks daily stock price performance for every U.S. stock listed within the CRSP.9Eventus uses a common “event-study” methodology to calculate abnormal stock returns, and it indicates statistical significance levels. Statistically, a null hypothesis (H0) was proposed and tested against an alternative hypothesis (Ha). H0 = EMP announcements have no impact on stock price.Ha = EMP announcements have a positive impact on stock price.
Does Long-term Investment Really Pay Off? Evidence from Listed Mining Firms in Canada
Published in Karen Wendt, Green and Social Economy Finance, 2021
We adopt both event study and calendar time portfolio methods in the measurement of post-listing returns of mining firms. The event study method introduced by Fama et al. (1969) allows the examination of cross-sectional performance of various stocks after their IPOs, with consideration of various firm-level events, such as stock splits, over certain time windows. To be specific, we adopt CAR and BHAR measurements for mining firms’ post-listing long-term performance. In addition, we adopt calendar time method (Fama and French 1993) in examination of post-listing long-term performance of mining firms, where t-test is incorporated into the long-term excess return assessment. A great advantage of the calendar time method is that it eliminates the bias caused by cross-sectional sample firm observations. However, it is less capable of detecting certain dummy variables, such as investor experience (Brav and Gompers 1997). As a result, we use both event study and calendar time methods in our examination of post-listing long-term performance of mining firms.
How Green Projects Affect Stock Prices
Published in Eric A. Woodroof, Green Facilities Handbook, 2020
John R. Wingender, Eric A. Woodroof
For each announcement, the firm’s name, CRSP identification number and announcement date were entered into the Eventus computer program, which tracks daily stock price performance for every U.S. stock listed within the CRSP.9 Eventus uses a common “event-study” methodology to calculate abnormal stock returns, and indicates statistical significance levels. Statistically, a null hypothesis (Ho) was proposed and tested against an alternative hypothesis (Ha): Ho = EMP announcements have no impact on stock price.Ha = EMP announcements have a positive impact on stock price.
The COVID-19 pandemic and shareholder value: impact and mitigation
Published in International Journal of Production Research, 2023
Maximilian Klöckner, Christoph G. Schmidt, Stephan M. Wagner
The established event study method allows researchers to analyse the shareholder value impact associated with a specific event (McWilliams and Siegel 1997; Brown and Warner 1985). As the method facilitates the assessment of financial firm performance on the stock market, it is also a prominent approach in empirical operations and supply chain management research (e.g. Lo et al. 2018; Ni, Flynn, and Jacobs 2016; Zsidisin, Petkova, and Dam 2016). Event studies rely on the central assumption of an efficient market, in which stock prices instantaneously reflect any public information related to an event (McWilliams and Siegel 1997). As prior studies provide excellent summaries of this method (see Kothari and Warner 2006; McWilliams and Siegel 1997), we limit our discussion here to the key design decisions, regarding the definition of the event window, and the computation of abnormal returns.
Does Engaging in Data Philanthropy Impact Business Value?
Published in Information Systems Management, 2023
Jordana J. George, Jie Yan, Dorothy E. Leidner, Pranjal Awasthi
We treat announcements, analyst mentions, and press coverage of a firm engaging in DP as events and employed an event study methodology. Event study fits with testing for the business value of DP because the effect of an event on firm value will be reflected immediately in the stock price, under the efficient market hypothesis (Muller & Kräussl, 2011). Efficient markets fully reflect available information and thus stock price is a reasonable indicator of firm value (Fama, 1970; M.C. Jensen, 1978). Using stock return data therefore can measure the effect of a specific event on the value of a firm (Dong & Wu, 2015). A general guideline for event study is defining the event of interest (i.e., announcements of a firm engaging in data philanthropy), identifying the event window (usually the day before, of and after the announcement), and measuring the abnormal return (the actual ex post return of the stock minus the normal return of the stock over the event window; Dong & Wu, 2015). A number of studies in the business ethics literature have adopted the event study method (e.g., Chang et al., 2018; Zhang et al., 2016). Below we discuss the variables and measures of our event study in detail.
The effect of technology driven mergers and acquisitions on firm performance in the U.S. textile industry
Published in The Journal of The Textile Institute, 2023
An event study is an empirical analysis of stock prices that experienced a significant event, such as M&A, earnings announcements, new debt or equity issues and repurchases, and macro announcements (e.g. GDP). An event study assesses the impact of an event on the value of a firm’s security by estimating its abnormal returns. Ball and Brown (1968) define “abnormal return” as the difference between the actual and normal returns. Specifically, an abnormal return is the return generated by a given stock or portfolio over a period of time that is higher than the return generated by the benchmark model or the return predicted by an equilibrium model such as the capital asset pricing model (CAPM; Ball & Brown, 1968).