An Empirical Analysis of Differential Capital Market Reactions to Extraordinary Accounting Items

1976 ◽  
Vol 31 (2) ◽  
pp. 651 ◽  
Author(s):  
Robert K. Eskew ◽  
William F. Wright
Keyword(s):  
Empirical Analysis ◽  
Capital Market ◽  
Market Reactions

Capital Market Reactions to Project Finance Loans

2021 ◽  
pp. 102115
Author(s):  
Manel Kammoun ◽  
Gabriel J. Power ◽  
Djerry C. Tandja M
Keyword(s):  
Capital Market ◽  
Project Finance ◽  
Market Reactions

Stock market reactions to layoff announcements – analysis of the renewable energy sector

2017 ◽  
Vol 11 (2) ◽  
pp. 311-328 ◽  
Author(s):  
Stephan Kunert ◽  
Dirk Schiereck ◽  
Christopher Welkoborsky
Keyword(s):  
Renewable Energy ◽  
Stock Market ◽  
Capital Market ◽  
Abnormal Returns ◽  
Shareholder Wealth ◽  
Energy Sector ◽  
Market Reactions ◽  
Content Type ◽  
The Public ◽  
Stock Market Reactions

Purpose This study aims to analyze stock market reactions to layoff announcements in the renewable energy sector. The global renewable energy sector and most of the producers of wind and solar energy equipment are struggling. While changes in the regulation and in the promotion of energy production from renewable sources reduced the attractiveness of these technologies, many involved companies had to downsized their workforce to increase performance. The public often perceives these announcements as a way of increasing shareholder wealth at the cost of the employees. Support for this claim is often given in the form of isolated case study considerations. However, the case may be different for the renewable energy sector as changes in the overall institutional environment have sustainably deteriorated the prospects of this industry. Design/methodology/approach This study analyses stock market reactions of 65 layoff announcements made by companies in the renewable energy industry in the years from 2005 to 2014. The reactions are measured by cumulative abnormal returns, which are obtained by using the event study methodology. Findings It shows a significantly negative market reaction to the announcement of a layoff plan on the event day. The findings are generally in line with our expectations and underline the negative perspectives of the sector from a capital market point of view and the declining importance of the sector with respect to employment numbers. Originality/value The results of this study are important for investors when estimating the capital market reactions to layoff announcements and when they form their own expectations regarding possible future layoff announcements. For the public, the results are of interest as the prejudice, that layoff plans are used to increase shareholder wealth, can be dismantled. The opposite is shown.

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