•Larger firms with greater cash reserves and higher market-to-book ratios were impacted less under COVID-19.•Rational pricing existed for the stocks of airline and hospitality firms during the ...emergence of COVID-19•Investors particularly valued cash reserves under COVID-19 for the hotel industry.•Firms in the airline, hotel, and tourism industries with greater leverage were impacted more under COVID-19.
This paper investigates the stock market performance from the second half of February through the latter portion of March 2020 for U.S. travel-related firms (airlines, restaurants, and hotels) in response to the COVID-19 pandemic. Clearly the reduction in travel was negative news for the travel industry; however, we focus on the factors used by market participants to price the information into stock prices. We find that larger firms with greater cash reserves and higher market-to-book ratios experienced less negative returns, while firms with greater leverage were penalized more. Additionally, we find that cash reserves were particularly important for hotels.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
Although event-study methodology is invaluable to strategic management research, we argue that the traditional financial economic rationale on which it is based has led scholars to assume away the ...behavioral mechanisms underlying investor reactions. Building on behavioral theory from management, psychology, and economics, we set out to develop a behavioral perspective on investor reactions to acquisition announcements—one that relaxes the assumption of investors making objective, rational-deductive calculations. Given the information asymmetry they face, we theorize that investors (1) infer management's perception of an acquisition's synergistic potential from the premium it pays, and (2) draw on additional public information to assess the reliability of that perception. Using a multi-industry sample of acquisitions by North American firms, we find considerable support for our behavioral framework.
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BFBNIB, FZAB, GIS, IJS, KILJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBMB, UL, UM, UPUK
•Financial assets are impacted by a firm’s climate change vulnerability.•Regulatory uncertainty exacerbates the risks perceived by companies and investors.•Donald Trump’s unexpected victory ...represented an exogenous shock to individual firms.•Machine learning analysis of earnings calls assessed a firm’s climate change exposure.•Firms exposed to climate change saw a reduction in shareholder wealth after Trump’s election.
Exploiting a novel measure of firm-specific exposure to climate change generated from cutting-edge machine learning algorithms, we explore the effect of climate change vulnerability on shareholder wealth using Donald Trump’s unexpected election victory in 2016. Our results demonstrate that companies more vulnerable to climate change experienced significantly more adverse market reactions when Trump was elected. Considering Trump’s public skepticism on climate change, investors expected him to oppose actions that seriously addressed climate change, resulting in more negative consequences for firms with higher climate change exposure. Our results provide compelling evidence that the positions taken by politicians on climate change directly impact firm value and shareholder wealth. Our findings suggest that elections have significant ramifications on financial and capital markets and that climate change is a crucially important issue for shareholders and investors.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
•The impacts of COVID-19 on China's green bond market are investigated.•COVID-19 has significant impacts on the market and increases the cumulative abnormal return (CAR).•The extent of negative ...impacts depends on issuers’ governance capacity (emp), information asymmetry (InfoAsym) and debt-paying ability (debt-paying).•The impacts of emp, InfoAsym and debt-paying on the CAR are heterogeneous due to property rights and whether they are listed or not.
The paper applies the event study method and econometric models to investigate the impacts of COVID-19 on China's green bond market for the first time. We find that (1) the COVID-19 pandemic has significant impacts on China's green bond market and increases the cumulative abnormal return (CAR) of the green bonds greatly. After the pandemic is relieved, the CAR drops significantly; (2) the improving of bond issuers’ governance capacity, the weakening of information asymmetry and the reinforcing of debt-paying ability can effectively mitigate the negative impacts and positively promote the recovery of bond issuers after the pandemic; (3) the impacts of bond issuers’ governance capacity, information asymmetry and debt-paying ability on the CAR of green bonds are significantly heterogeneous before and after the pandemic due to their property rights and whether they are listed or not.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
The marketing–finance interface is an important research field in marketing, helping demonstrate the accountability of marketing within companies and building a necessary interdisciplinary bridge to ...finance and accounting research. Since the first comprehensive review article by Srinivasan and Hanssens (2009), the marketing–finance field has broadened considerably, as has research in finance and accounting. This updated systematic review of extant and new research integrates research in marketing, finance, and accounting into an overarching marketing–finance research framework. We discuss new methodological developments and offer solutions to recent technical debates on the event-study method and Tobin's q. Motivated in part by a survey of marketing–finance researchers, the article identifies and synthesizes four key emerging research areas: digital marketing and firm value, tradeoffs between “doing good” and “doing well,” the mechanisms of firm-value effects, and feedback effects. The article closes with a future research agenda for this dynamic research field and offers key conclusions.
•A new broad interdisciplinary review of the marketing–finance interface.•Categorization of a comprehensive set of metrics into an overarching framework.•Special emphasis on resolving methodological debates (event study, Tobin's q).•Synthesis of findings in four important research areas (e.g., digital marketing).•Provision of a rich research agenda for the next ten years.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
This study investigates the impact of product recalls on the financial performance of competitors of recalling firms. By applying the event study methodology to a broad range of consumer product ...recalls across various industries, we assess how recalls influence competitors’ short-term abnormal returns in the stock market. We find that product recalls have a negative spillover effect on competitors’ short-term stock returns. In addition, the study reveals the role of two key recall characteristics: the severity of product hazards and the type of recall strategy (proactive vs. passive), in influencing the effect of product recalls on competitors’ stock returns. Specifically, competitors benefit more when product hazards are severe or when recalling firms employ a passive recall strategy. This research contributes to the literature by offering a deep understanding of the competitive effects of product recalls.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
Adoption of third-party channels for last mile delivery has been a significant change for retail firms. Despite the volume of work in this space, how last-mile delivery partnerships impact a retail ...firm’s financial valuation has received little attention. Adopting a resource-based view, we explore how third-party delivery firms add value through their unique capabilities. Results from an event study reveal that, on average, third-party delivery partnerships improve firm performance. However, subsequent analysis reveals that firms do not equally benefit from these partnerships. In particular, the density of firms’ presence in the marketplace and retailers’ level of service provision can affect the relative benefit of third-party partnerships.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
This paper assesses the U.S. foreign trade effects of port congestion and container shortages using event studies and monthly trade data at the port-product level. The results show that the U.S. ...exported 24.5 percent fewer containers between May and November 2021, amounting to export losses of -$15.7 billion. In addition, I document considerable heterogeneity between commodities, with chemical products, followed by transport equipment, machinery, and vegetable products facing the brunt of the economic damages. These estimates indicate how port congestion and container shortages undermine the competitiveness of U.S. businesses in foreign markets.
•Supply chain disruptions resulted in lower U.S. exports from May to November 2021.•Containerized exports declined by 24.5 percent during that period.•The estimated trade effects correspond to -$15.7 billion in export losses.•We provide evidence for differentiated economic impacts across geographic regions.•The paper shows considerable heterogeneity across commodity groups.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
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