We examine whether intra–industry information transfers from going–concern audit opinion announcements create contagion or competitive stock price reactions for other real estate firms operating in the same line of business. Using returns from publicly-traded land subdivision/development firms and Real Estate Investment Trusts, we find modest evidence supporting a competitive effect among rival firms as a result of another real estate firm announcing the receipt of a Going Concern Opinion (GCO) from its independent auditors. Copyright Springer Science + Business Media, LLC 2006Going concern opinions, Contagion effect, Competitive effect,

With the vicissitude of the capital markets, investors continually seek new and innovative techniques that will identify securities that outperform the market. In addition to the usual fundamental and technical analysis, the international markets may provide enhanced profit potential. Investors may purchase securities of foreign companies to gain greater diversity and new investment opportunities.

A sample of twenty‐six Mexican and fifty‐nine Canadian equities listed on the New York Stock Exchange are examined to determine whether these foreign equities outperform the S&P 500 as a result of the North American Free Trade Agreement of 1994. Data are tested for significant differences in performance before and after the introduction of NAFTA during the period 1980‐2000. Findings show no significant post‐NAFTAdifference in the three‐year performance of the Mexican equities. However, the post‐NAFTA sample of Canadian equities significantly outperformed the S&P 500 by 28.8 percent, perhaps suggesting a NAFTA‐related wealth effect for the Canadian firms.

With the growth of free-trade agreements and the development of a global economy, foreign equities may seem to provide a lucrative and diversified alternative for portfolio managers and individual investors. During the study period, all 35 newly issued foreign manufacturing firm equities from 18 countries listed on the New York Stock Exchange traded as American Depository Receipts (ADRs) are examined to determine short term investment performance relative to the market. The Standard & Poors 500 Index serves as a proxy for the performance of the market. Data are tested for significant differences in returns during the period of January 1, 1990 to December 31, 2002 during the first 21 days of trading after their initial listing. In addition, the equities are examined to determine whether differences exist in those from emerging and developed countries and whether the timing of issue (in the U.S. bull and bear market) affects returns. Findings suggest no significant difference in the overall short-term performance of the manufacturing firm ADRs relative to the S&P500 Index during the first 21 days of trading. Further examination indicates that initial public offerings significantly out-perform the market by 5.0 percent and seasoned equity offerings performance is not significantly different from the S&P 500. Manufacturing firm ADR returns from developed markets and their counterparts from emerging markets show no significant difference from the performance of the market index. However, timing of the issue shows the most dramatic contrast in performance. ADRs issued before 1/1/98, primarily in a bull market, significantly underperformed the market by 26.51 percent. Those issued in the bear market after 1/1/98 show 9 months of returns that are positive and significant during the 36-month holding period. Evidence suggests that initial public offerings and timing of issue may affect manufacturing firm ADR portfolio performance to achieve returns greater than the market.

Because of the growth of international trade and the increase in sales and profits in the food and beverage industry in recent years investors may believe there is a great opportunity to reap high returns from foreign equities. Cumulative excess returns from all newly issued foreign food and beverage equities over a 36-month period following the date listed on the New York Stock Exchange are tested for significant differences in performance to determine whether they outperform the S & P 500 returns. Although the 36-month cumulative excess returns are not significant, findings indicate that the food and beverage ADRs performed 13.55 percent lower than the S & P 500 Index which serves as a proxy for the market in general. Food and beverage seasoned equity offerings outperformed initial public offerings.