This study examines the short-term impact of the 2019 novel coronavirus (COVID-19) outbreak on 52 listed airline companies around the world by using event study methodology. The results demonstrate ...that airline stock returns decline more significantly than the market returns after three major COVID-19 announcements were made. Overall, investors react differently during the three selected events. The strongest overreaction is noted in the post-event period of the World Health Organization's and President Trump's official announcements. Moreover, the findings confirm that traders in Western countries are more responsive to recent information than the rest of the world. The findings call for immediate policy designs in order to alleviate the impact of the pandemic in the airline industry around the globe.
-We examine the impacts of COVID-19 on the global airline stock performance.-Investors react differently during the three selected events.-The strongest overreaction is noted in the post-event period of the World Health Organization's and President Trump's official announcements.-The findings confirm that traders in Western countries are more responsive to recent information than the rest of the world.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
A More Credible Approach to Parallel Trends Rambachan, Ashesh; Roth, Jonathan
Review of economic studies/The review of economic studies,
09/2023, Volume:
90, Issue:
5
Journal Article
Peer reviewed
Open access
Abstract
This paper proposes tools for robust inference in difference-in-differences and event-study designs where the parallel trends assumption may be violated. Instead of requiring that parallel ...trends holds exactly, we impose restrictions on how different the post-treatment violations of parallel trends can be from the pre-treatment differences in trends (“pre-trends”). The causal parameter of interest is partially identified under these restrictions. We introduce two approaches that guarantee uniformly valid inference under the imposed restrictions, and we derive novel results showing that they have desirable power properties in our context. We illustrate how economic knowledge can inform the restrictions on the possible violations of parallel trends in two economic applications. We also highlight how our approach can be used to conduct sensitivity analyses showing what causal conclusions can be drawn under various restrictions on the possible violations of the parallel trends assumption.
With soaring labor and logistics costs in developing countries, supply chain disruptions during the COVID-19 pandemic triggered Western firms to “reshore” some of their offshore operations (performed ...in-house or outsourced) for certain strategically important products or production processes from foreign countries to their home countries. Although reshoring can create more domestic jobs and reduce supply chain risks, the impact of various external and internal risks associated with reshoring on market reaction remains unclear. This observation motivates us first to conduct a text mining analysis, revealing four important types of reshoring risks inherent to (1) foreign currency fluctuation, (2) intellectual property (IP) protection, (3) reshoring types (in-house, insourced, or outsourcing-to-outsourcing (OTO)), and (4) reshoring location choice (Republican- versus Democrat-led states). We then examine how these risk factors help explain the variations in reshoring’s market valuation based on 281 reshoring initiatives of 132 publicly traded firms in the United States announced between 2009 and 2022. Our empirical analysis reveals that the market reacts more positively to a firm’s reshoring announcement when the firm reshores under a high-currency-fluctuation environment or from countries with weak IP protection. However, the market’s reaction is more negative when the firm’s reshoring announcement entails insourced reshoring operations or when the reshored location is a Democrat- rather than Republican-led state. We do not find a significant market reaction to OTO reshoring. This paper was accepted by Vishal Gaur, operations management. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2022.00599 .
To navigate the unchartered terrain that has resulted from the pandemic, there is a palpable need for hotels to re-assess current business practices, and quickly devise new and innovative strategies ...that safeguard the health and safety of guests as well as employees and, consequently, restore consumer confidence. The objective of this article is to assess the utility of these new innovations by looking at shareholders' perceptions. The empirical application shows that the innovations implemented are seen as effective, although differential effects exist among innovation types. The results could help hotels sustain and expand the innovative responses that work (among which product innovations stand out), and discontinue those that are less effective.
•Hotels' COVID-19 innovations are perceived to be effective.•Not all innovations that have been deployed have a similar effect on performance.•Product innovations provide the highest level of confidence.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
Extreme climatic events (ECEs) are predicted to become more frequent as the climate changes. A rapidly increasing number of studies – though few on animals – suggest that the biological consequences ...of ECEs can be severe. However, ecological research on the impacts of ECEs has been limited by a lack of cohesiveness and structure. ECEs are often poorly defined and have often been confusingly equated with climatic variability, making comparison between studies difficult. In addition, a focus on short‐term studies has provided us with little information on the long‐term implications of ECEs, and the descriptive and anecdotal nature of many studies has meant it is still unclear what the key research questions are. Synthesizing the current state of work is essential to identify ways to make progress. We conduct a synthesis of the literature and discuss conceptual and practical challenges faced by research on ECEs. We consider three steps to advance research. First, we discuss the importance of choosing an ECE definition and identify the pros and cons of ‘climatological’ and ‘biological’ definitions of ECEs. Secondly, we advocate research beyond short‐term descriptive studies to address questions concerning the long‐term implications of ECEs, focussing on selective pressures and phenotypically plastic responses and how they might differ from responses to a changing climatic mean. Finally, we encourage a greater focus on multi‐event studies that help us understand the implications of changing patterns of ECEs, through the combined use of modelling, experimental and observational field studies. This study aims to open a discussion on the definitions, questions and methods currently used to study ECEs, which will lead to a more cohesive approach to future ECE research.
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BFBNIB, FZAB, GIS, IJS, INZLJ, KILJ, NLZOH, NMLJ, NUK, OILJ, PNG, SAZU, SBCE, SBMB, UL, UM, UPUK, ZRSKP
This paper uses Swedish administrative data to examine the impact of grandparenthood on retirement behaviour. For causal identification, I exploit conditionally random variation in the births of ...first grandchildren using an event study design. The results show a significant increase in the retirement probability for grandmothers and grandfathers when the first grandchild is born, with no significant differences between them. The effects of the arrival of the grandchild on retirement increase over time after the grandchild is born. The incremental effects are larger among grandparents in the upper half of the earnings distribution than among their counterparts. The findings suggest that grandparenthood makes grandfathers and grandmothers less elastic to financial incentives and other regulations that also promote longer working lives in a country with generous family policies, such as Sweden.
•Children affect parents’ labour supply, but little is known about grandparenthood.•I use Swedish data and event study to estimate grandparenthood’s impact on retirement.•Grandchildren increase retirement likelihoods for both grandparents, equally.•Grandchild’s arrival affects retirement in subsequent years.•Stronger effect on grandparents who can cope with labour exits.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
•Short-term event study of stock price reaction to Russia's invasion of Ukraine.•Energy firms outperform the stock market following Russian invasion.•North American energy firms report the highest ...outperformance.•Outperformance varies by region and industry group.•Regional results appear to be consistent with existing oil and gas trade agreements.
We investigate whether the Russia-Ukraine conflict has affected energy firms’ stock prices. Based on a global sample of 1630 energy firms, we conduct an event study around Russia's invasion on February 24, 2022. We find that cumulative average abnormal returns of these firms are positive around the event, i.e., energy firms outperformed the stock market. This outperformance is higher for North American firms than European and Asian ones. Our results provide evidence of energy firm outperformance in those export markets that compete with Russian suppliers of renewables, fossil fuels and uranium, following the Russian-Ukraine invasion.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
Transitway investment often has an unintended negative consequence of commer- cial gentrification – the process by which land-use changes devalue some land and increase value for others, leading to ...business turnover that particularly affects small firms. Using cross sectional data on over 24,000 establishment-year observations of retail stores, restaurants and personal services establishments, we examine how the construction and opening of the Green Line Light Rail Transit in Minneapolis and St. Paul affected sales volume and employment at nearby businesses. Using pre-and-post construction local polynomial regressions, we find that establishments within about 750 meters of a new transit station are negatively affected by transit station opening, and integrate this distance threshold into event study difference-in-differences mod- els that allow us to estimate how treatment effects change over time. We find that single location firms’ sales volumes begin to experience a 13% reduction (compared to untreated establishments) about two years after LRT becomes operational but are unaffected during construction. By contrast establishments owned by firms with mul- tiple locations do not experience significant sales volume effects. Employment at both types of establishments was unaffected. We test the robustness of models and explore potential explanations for results.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
•Impact of the Russian invasion of Ukraine on global stock market indices.•Developed markets more heavily and negatively impacted than emerging markets.•Exceptionally, US markets positively impacted ...by the war on the event day.•War has not affected Asian markets.•Trade-to-GDP negatively associated with abnormal returns during the war.
Using an event study methodology to examine the impact of the 2022 Russian invasion of Ukraine, we find that this invasion generated negative cumulative abnormal returns for global stock market indices, but with heterogeneous effects. Cross-sectional analysis reveals that economic globalization as measured by GDP-scaled trade is negatively associated with event-day and post-event returns. Consistent with the expected economic stimulus of military preparedness, markets of NATO countries exhibited higher returns. Results are consistent with markets of more globalized economies being more vulnerable to international conflicts, with, however, notable heterogeneities.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP