Market Reaction to Entry Timing of Corporate Capital Investment Announcement: Evidence from Announcement-Period Abnormal Returns and Analysts' Earnings Forecast Revisions

Abstract

The main purpose of this study is to investigate the relative advantages and disadvantages of first-mover hypotheses by examining the role of entry timing in the announcement effects of corporate capital investment. Our empirical results suggest that those firms first announcing their capital investment will experience greater share-price effects than the followers in the same industry. In addition, the financial analysts tend to revise upward their announcement-period earnings forecasts for those capital investment announcers, suggesting that announcements of capital investment convey positive information about the earnings prospects of the announcing firms. Furthermore, analysts' revisions of earnings forecasts subsequent to such announcements are more favorable for leading-announcer firms than the followers. Overall, our findings provide fully support for the first-mover advantages hypothesis, indicating the importance of the entry timing when announcing a corporate capital investment.

An Investor's Perspective on Infectious Diseases and Their Influence on Market Behavior

“…An event study is widely applied to determine whether there has been any information effect on the stock performance around the announcement date in different events (Davidson et al 1987;Rajiv et al 1993;Bradford, Robinson 1997;Patten, Nance 1998;Pantzalis et al 2000;Chen, Su 2010;Lai et al 2010;Ramiah et al 2010;Asgharian et al 2011;Cheung 2011;Li, Tallman 2011;Ramchander et al 2012). Recent literature used event study to measure the effect of specific events, such as the effect of the Alaskan oil spill on the stock performance of petroleum companies and the effect of war on the stock performance of transportation companies.…”

The Impact of Resumption of Former Top Executives on Stock Prices: An Event Study Approach

“…This study adopted the event study methodology (Brown, Warner 1980;Corhay, Tourani 1994;Pantzalis et al 2000;Chen, Su 2010;Lai et al 2010; to analyze the impact of resumption of top executives on stock price before and after the announcement of such event. This method assumes that the market quickly and sufficiently responds to public information whenever specific events happen.…”

رد فعل السوق المصریة للإعلان عن الإنفاق الرأسمالی

“…‫املستخدمة‬ ‫النامذج‬ ‫أكرث‬ ‫من‬ ‫بإعتباره‬ ‫للسهم‬ ‫املتوقع‬ ‫العاهد‬ ‫إلحتساب‬ ‫الرأساملية‬ ‫األصود‬ ‫تسعري‬ ‫منوذج‬ ‫يستخدم‬ ‫ـابهة‬ ‫املشـ‬ ‫اسات‬ ‫الدر‬ ‫يف‬ (Ozbebek, et. al., 2011;Chen, et. al., 2010;Akbar, et.…”

“…al., 2014;Chen, et. al., 2007;Chen, 2006 (Lynn, et.al., 2011;Chen, et. al., 2010;Bhana, 2008 (Jones, et.…”

“…al. ‫رمبا‬ . ‫الش‬ ‫أرباح‬ ‫عن‬ ‫وإيجابية‬ ‫قيمة‬ ‫معلومات‬ ‫تنقل‬ ‫اإلعالنات‬ ‫هذه‬ ‫أن‬ ‫إيل‬ ‫اإلستجابة‬ ‫هذه‬ ‫ترجع‬ ‫ـ‬ ‫ركات‬ (Chen, et. al., 2010) ‫إُيا‬ ‫إيل‬ ‫ترجع‬ ‫أن‬ ‫ُيكن‬ ‫كام‬ .…”