Geographic dimension, information asymmetry, and the success of crowdfunding campaigns

Omrani, Nessrine; Maâlaoui, Adnane; Pérez, Charles; Bertrand, Gaël; Germon, Rony

doi:10.1504/ijesb.2022.120551

Cited by 1 publication

(1 citation statement)

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“…All these are characteristics of the firms that are covered less by information technology. Additionally, there is also the issue of the correctness of information over social media (Sen, 2001; Carling and Lundberg, 2005; Owen and Yawson, 2013; Omrani et al ., 2022).…”

Section: Notesmentioning

confidence: 99%

Spillover effects of crash and jump events: evidence from Chinese market

Usman¹,

Akhter²,

Haque³

2023

CFRI

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PurposeThis paper aims to investigate the spillover effects of jump and crash events among Chinese nonfinancial firms.Design/methodology/approachThis sample consists of more than 1.5 million weekly observations of over 3,000 Chinese listed firms over the period 1991–2015. The authors utilize univariate tests to compare the post-event performance of matched peer and non-peer control firms and cross-sectional regressions of their abnormal returns/cumulative abnormal returns (ARs/CARs) and returns on assets (ROAs).FindingsThe authors find that extreme risk-adjusted abnormal stock returns (stock price crashes and jumps) generate statistically significant ARs/CARs in the same directions in industry, size, leverage, and geographical location matched peer firms in Chinese stock market. Further tests reveal that peer firms' response to the crash event is pronounced more in the group of firms about which the information asymmetry is high between investors and firms.Research limitations/implicationsPortfolio investors can adjust their portfolios accordingly by selling stocks of the matching rival firms during a crash period. Policymakers may develop policies so as to protect the interests of small investors in the events of crashes in the markets. They can reduce the information asymmetry between the firms and the investors by making information about the firms more transparent, so as to reduce the contagion in case of crash event.Practical implicationsThis study has important implications for portfolio investment managers and policymakers.Originality/valueTo the best of authors' knowledge, this is the first study that combines the jump and crash events and attempts to assess their spillover effects on other firms in Chinese stock market.

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