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Investors' Evaluations Of Price-Increase Preannouncements, Leon Gim Lim, Kapil R. Tuli, Marnik G. Dekimpe
Investors' Evaluations Of Price-Increase Preannouncements, Leon Gim Lim, Kapil R. Tuli, Marnik G. Dekimpe
Research Collection Lee Kong Chian School Of Business
Several firms preannounce their price increases with the expectation that such announcements will be evaluated favorably by investors. However, little is known about the actual effect they have on shareholder value. Accordingly, the authors present the first systematic empirical examination of investors' evaluations of 274 price-increase preannouncements (PIPs). Results show that whereas the average increase in abnormal returns following a PIP is 0.51%, almost 41% of the PIPs result in negative abnormal returns. To explore this heterogeneity, the authors propose a conceptual framework that focuses on three key pieces of information that investors can use when evaluating a PIP: information …
An Event Study Analysis Of Too-Big-To-Fail After The Dodd-Frank Act: Who Is Too Big To Fail?, Kyle D. Allen, Ken B. Cyree, Matthew D. Whitledge, Drew B. Winters
An Event Study Analysis Of Too-Big-To-Fail After The Dodd-Frank Act: Who Is Too Big To Fail?, Kyle D. Allen, Ken B. Cyree, Matthew D. Whitledge, Drew B. Winters
Marketing Faculty Publications and Presentations
One feature of the Dodd-Frank Act is the elimination of too-big-to-fail (TBTF) banks. TBTF is a government guarantee of large banks that has been shown to increase the value of these banks, so removing the guarantee should result in a price decline of TBTF bank stock. Using event study methods, we find very limited reaction to the process of eliminating TBTF. Specifically, there is limited reaction among the largest banks and banks receiving special attention, such as Systemically Important Financial Institutions (SIFI) banks. Instead, smaller banks not receiving special attention show some evidence of negative returns with the elimination of …