During the early stage of the COVID-19 pandemic, many countries and regions issued travel restrictions to prevent the spread of the virus. However, little is known about the impacts of such policy ...changes on individual businesses, particularly multinational enterprises (MNEs) that involved in business activities across countries. Drawing upon signaling theory and resource dependence theory, we find that the MNEs directly affected by travel restrictions experience significant reductions in shareholder value in both the short and long term. Furthermore, state ownership mitigates the negative effect of travel restrictions on MNEs, but having a large number of overseas subsidiaries and high-tech characteristics deepens the adverse effects caused by travel restrictions. These findings offer new research directions for international business scholars to explore the economic consequences of public policies resulting from global emergencies, and provide insightful lessons for managers to respond to international crises and for policymakers to develop future public policies.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
Research summary: This study examines whether the stock and bond prices of firms engaging in corporate social responsibility (CSR) can benefit from insurance-like effects during occurrences of ...negative events. Our results suggest that in the face of negative events, engagement in CSR on a continuous, long-term basis provides insurance-like effects on both the stock and bond prices of firms. Nevertheless, the effects are found to quickly disappear following the occurrence of a second, or subsequent, negative event. Although our results clearly indicate that firms need to allocate some of their available resources to long-term strategic CSR activities, managers must also realize that in a crisis communication, they will probably be able to use their CSR claims on one occasion only. Managerial summary: The purpose of this article is to examine whether firms engaging in corporate social responsibility (CSR) can benefit from insurance-like effects during occurrences of negative events. We find that on the occurrence of a negative event, long-term CSR engagement does have insurance-like effects. We also find that these insurance-like effects may quickly disappear following the occurrence of a second negative event. Managers of firms with a long history of CSR activities need to realize that in a crisis communication, they can probably use their claims of adherence to CSR only once.
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BFBNIB, FZAB, GIS, IJS, KILJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBMB, UL, UM, UPUK
•Fear of pandemic can explain the initial IPO returns.•The association is stronger when we consider the propensity score-matched adjusted returns.•Analysis of post-IPO date performance suggests that ...the performance of IPO firms are more sensitive to the fear of pandemic than that of existing firms.•The results are robust when we use a multivariate matching technique: entropy balancing approach.
This study analyzes the relationship between COVID-19 related fear and short-term IPO performance. Though the average market-adjusted initial return of IPOs in the year 2020 is higher than that of the last four decades, it decreases if fear of pandemic increases. The evidence is robust when we use matching firm-adjusted initial returns. Next, we analyze the persistence of performance after the IPO date. The results show that the performance of IPO firms is more sensitive to the fear of the pandemic than the performance of similar existing firms.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
Movie-induced tourism is significant for destination marketing. Although various studies have analyzed movie-induced tourism in the past, none of the earlier studies have investigated the ...movie-induced tourism for Bollywood movies. The present study fills the gap and examines the movie-induced
tourism for Bollywood movies. The data has been collected for a total of 86 Bollywood movies, and the tourist location it promotes in the movie. The study further employs the event study methodology to understand the influence of the release of the movies on the number of tourists visiting
the particular location. The results of the event study suggest that the tourism of a specific place is highly influenced by the movies and thus validated the movie-induced tourism for Bollywood movies. The findings of the study could be used to promote lesser-known regions by portraying them
in Bollywood movies and then by subsequent promotions.
Firms are increasingly held accountable for their suppliers' transgressions. Consequently, firms need to develop upstream visibility to exercise control over their supply chains. An emerging body of ...work has recognized the importance of supply chain visibility and has examined it using analytical models, behavioral methods, and case studies. Still, large‐sample empirical evidence on the benefits of supply chain visibility remains elusive. We seek to bridge this gap by examining conflict minerals disclosures (mandated by the 2010 Dodd‐Frank Wall Street Reform and Consumer Protection Act) and financial reports to evaluate whether firms with greater visibility into their conflict minerals supply chains achieve improved operating and market performance. We use the data from conflict minerals disclosures (Form SD) to distinguish between firms that have high or low visibility into their conflict minerals sources. Then, we use event study methods to analyze differences in operating and market performance between firms with high visibility and firms with low visibility. We find that firms with high visibility into their conflict minerals supply chains achieve higher profitability than comparable firms with less visibility. In addition, we find that firms with high visibility into their conflict minerals supply chains realize improved sales performance and stock market valuations. Our results are relevant to managers because they show that firms can attain operational and market benefits by improving visibility in their supply chains.
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FZAB, GIS, IJS, KILJ, NLZOH, NUK, OILJ, SAZU, SBCE, SBMB, UL, UM, UPUK
•Overall, shareholders view sports sponsorship announcements favorably.•The positive reactions to sports sponsorship announcements changed over time.•Sports sponsorship announcements are viewed more ...favorably when there is congruence.
The number of studies on the marketing–finance interface has escalated in response to increased interest in the value of marketing investments, such as sports sponsorship. This study integrates current research findings and establishes empirical generalizations on how sports sponsorship announcements impact firm value. The empirical literature finds contradicting results on the value shareholders place on these marketing investments. This paper addresses this issue by undertaking a meta-analysis on stock reactions to sport sponsorship announcements, using 3192 of these announcements taken from 36 studies (41 samples). On aggregate, these announcements drew the attention of shareholders since there was a positive and significant cumulative abnormal return (CAR). However, this positive effect was mostly observed in the 1990s and became negative in the 2000s. Overall, shareholders viewed sports sponsorship investments favorably when there was a functional and geographical congruence between sponsors and sponsees. This paper also shows that the differences in the CAR can be explained by controlling for confounding events and host country. The paper concludes by providing potential avenues for further research in sports sponsorship, using the event study method.
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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 examines the short-term market reaction of the airline industry to the declaration of COVID-19 as a global pandemic and to the announcements of the effectiveness of COVID-19 vaccines in ...the US. Using an event study, we observe a negative and statistically significant stock price reaction to the announcement of COVID-19 as a global pandemic. In contrast, we find a positive impact on the stock market due to the announcements of the effectiveness of COVID-19 vaccines in the US. These results are consistent with the investor sentiment hypothesis and the asset-pricing perspective. The empirical results also show a higher stock market reaction to the announcement of the effectiveness of the Pfizer–BioNTech COVID-19 vaccine in the US compared to the announcements of the effectiveness of subsequent vaccines. This result is explained by the innovation race competition effect and the greater reduction in investor uncertainty levels. These reactions were reinforced or mitigated by firm-specific characteristics such as liquidity, size, leverage, ownership concentration, state control and business model (i.e., low-cost versus full-service).
•We study stock market reactions during the COVID-19 pandemic in airline industry.•We employ an event study to investigate the short-term market reaction.•Stock markets react negatively to the declaration of COVID-19 as a global pandemic.•Stocks react positively to COVID-19 US-vaccines effectiveness results.•Firm-specific characteristics help to explain the cross-section of stock returns.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
This article explores the impact of the Russian-Ukraine war on the metals, conventional energy, and renewable energy markets, by using an event research technique. The data collected demonstrates a ...significant increase in the anomalous returns that are associated with the renewable energy industry. Apart from the gas oil index, none of the conventional energy or metals markets tend to exhibit large abnormal returns on the event day. Moreover, Europe was one of the first clean energy markets to react to war. The impact was, likewise, highest on the t+1 day, which was not the case that showed replication in the other markets. War had a significant influence on gold, platinum, palladium, and nickel, among other metals.
•This study examines the impact of Russo-Ukrainian war on energy markets and metal markets using the event study approach.•The abnormal returns are positively significant only in clean energy markets on the event day.•The index-level analysis shows that the European renewable market was the first to react to war news.•The impact of war was more prolonged on many clean energy indices, Gas oil, Gasoline, heating oil, Nickel, and Palladium in the post-event era.
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GEOZS, IJS, IMTLJ, KILJ, KISLJ, NLZOH, NUK, OILJ, PNG, SAZU, SBCE, SBJE, UILJ, UL, UM, UPCLJ, UPUK, ZAGLJ, ZRSKP
In today’s connected world, customer engagement behaviors are very important. Many companies launch initiatives to stimulate customer engagement. However, despite evidence that customer engagement ...behavior also matters to shareholders, academic research on the firm value consequences of customer engagement campaigns is limited. This study is the first to investigate the value-related consequences of firm-initiated customer engagement behaviors, using shareholder evaluations of the public announcements of such initiatives. We find that companies’ customer engagement initiatives, on average, decrease market value, which is likely because the shareholders are sensitive to the risk of these initiatives backfiring. Nevertheless, initiatives that stimulate word-of-mouth are viewed less negatively than initiatives that solicit customer feedback, as are initiatives that are supported by social media. Companies that operate in a competitive environment or do not advertise much can create value by stimulating customer engagement, while companies with a strong corporate reputation are likely to not benefit from it.
This paper evaluates the efficacy of the Secondary Market Corporate Credit Facility, a program designed to stabilize the U.S. corporate bond market during the COVID-19 pandemic. The program ...announcements on March 23 and April 9, 2020, significantly reduced investment-grade credit spreads across the maturity spectrum – irrespective of the program’s maturity-eligibility criterion – and ultimately restored the normal upward-sloping term structure of credit spreads. The Federal Reserve’s actual purchases reduced credit spreads of eligible bonds 3 basis points more than those of ineligible bonds, a sizable effect given the modest volume of purchases. A calibrated variant of the preferred habit model shows that a “dash for cash” – a selloff of shorter-term lowest-risk investment-grade bonds – combined with a spike in the arbitrageurs’ risk aversion, can account for the inversion of the investment-grade credit curve during the height of turmoil in the market. Consistent with the empirical findings, the Fed’s announcements, by reducing risk aversion and alleviating market segmentation, helped restore the upward-sloping credit curve in the investment-grade segment of the market.
•We evaluate the efficacy of the SMCCF, the Federal Reserve’s corporate bond-buying program.•The Fed’s announcements restored the normal upward-sloping term structure of credit spreads and had little to do with the program’s eligibility criteria.•The narrowing of credit spreads was due to a reduction in credit risk premiums.•Actual purchases had significant effects on credit spreads of program-eligible bonds.
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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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