The valuation effects of military contract awards surrounding 11th September

Palkar, Darshana D.; Larson, Stephen J.; Larson, Robert J.

doi:10.1080/09603107.2011.607126

Cited by 4 publications

(4 citation statements)

References 6 publications

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“…This positive abnormal performance has been particularly strong for firms in strategically important industries, such as those supplying the U.S. Department of Defense (Larson and Picou, 2002;McGowan and Vendrzyk, 2002;Wang and Miguel, 2012). Earlier findings on defense contractors suggest that their unique knowledge provides some negotiating leverage; they are expected to earn a positive NPV from their contracts, as reflected by the positive abnormal returns around the announcements of winning bids (Rogerson, 1989;Diltz, 1990;Palkar et al, 2012).…”

Section: Introductionmentioning

confidence: 97%

The effect of government contracts on corporate valuation

Esqueda

Ngo

Susnjara

2019

Journal of Banking & Finance

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Section: Introductionmentioning

confidence: 97%

The effect of government contracts on corporate valuation

Esqueda

Ngo

Susnjara

2019

Journal of Banking & Finance

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“…This viewpoint finds resonance in several studies. For instance, positive abnormal returns are a hallmark of firms securing government procurement contracts (Diltz, 1990; Larson & Picou, 2002; Palkar et al., 2012), a trend in line with Laffont and Tirole's assertions. Moreover, GSF have better profitability and operating performance (Lichtenberg, 1992; McGowan & Vendrzyk, 2002; Ngo, 2010).…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 93%

“…To reduce information asymmetry costs, government agencies require suppliers to have certain internal procedures, which subsequently improve external reporting quality (Samuels, 2021). In addition, GSF have higher profitability and better operating performance (McGowan & Vendrzyk, 2002; Ngo, 2010), positive abnormal stock returns (Larson & Picou, 2002; Palkar et al., 2012) and higher valuations among strategically important GSF (SI‐GSF) (Esqueda et al., 2019). However, GSF tend to have low insider ownership and weak corporate governance relative to non‐government suppliers (non‐GSF) (Ngo, 2010).…”

Section: Introductionmentioning

confidence: 99%

Corporate transparency among government suppliers: Implications for firm valuation

Esqueda,

Ngo

2023

Accounting & Finance

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Corporate transparency has a positive impact on firm valuation, as predicted by agency theory; however, the transparency of strategically important government suppliers is not rewarded with higher valuations as the market expects politically sensitive firms to be inherently more transparent. The association between transparency and valuation among politically sensitive firms is consistent with the political cost hypothesis. We address endogeneity concerns using propensity score matching, Heckman's self‐selection models and entropy balancing. Our findings offer novel insights, suggesting that the influence of transparency on corporate valuation varies with political sensitivity – a significant consideration for both finance professionals and scholars.

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“…Especially the terrorist attacks that took place on September 11, 2001, created great uneasiness for the American people and marked the beginning of a new era in the perspective of international markets on terrorism. The September 11 attacks also brought the immediate or delayed effects of terrorist attacks on national economies and financial markets to the agenda of academic studies (Charles and Darné, 2006;Rider, 2003;Shannon, 2012;Palkar, Larson, and Larson, 2012).…”

Section: Introductionmentioning

confidence: 99%

The impact of terrorism on Turkish financial markets: the sectoral approach

Şeker¹,

Yılmaz²

2022

Pressacademia

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Purpose- This study investigated the financial effects of the environment of uncertainty and fear resulting from terrorist attacks on sub-sectors such as industry, tourism, and service. Methodology- In order to examine the interaction between the variables, EGARCH models, which are frequently used in the econometric literature and take into account the asymmetric effect of shocks, were used. Unlike studies in the literature, terrorist attacks not only within the country but also outside the country were taken into consideration in this study. Findings- According to the findings obtained, the terrorist attacks and uncertainty environment in both Turkey in the developing country status and the US in the developed country status have an adverse affect the sub-sectors in financial markets at different levels. This adverse impact has been found that is not equal for each sub-sectors, and the tourism sector is more affected by terrorist attacks compared to the industrial and service sectors. Also, it has been found that news about terrorist attacks affected volatility more than good news in the same period. Conclusion- Considering the borderless structure and the size of the trade volume of financial markets in the globalizing world, it cannot be thought that terrorist attacks will not affect another country while they occur in one country. In view of the share of the tourism sector in the GDP of Turkey and the rational behavior of human factors in an environment of uncertainty and fear, the fact that the environment of uncertainty most affects this sector gives a result that is in line with expectations. In addition, it has been determined that financial market shocks resulting from the activities classified as terrorism experienced by countries with a large economic volume and market share in the world, especially the USA, have a short-term spill over effect on the global market. In this context, although ensuring goverment security creates an environment of trust, measures to be taken with the joint work of global security organizations to minimize these effects will help to protect the stable structure of the markets more effectively. Keywords: Financial markets, terrorism, exponential GARCH, sectoral analysis, volatility. JEL Codes: C22, C58, E44

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The valuation effects of military contract awards surrounding 11th September

Cited by 4 publications

References 6 publications

The effect of government contracts on corporate valuation

The effect of government contracts on corporate valuation

Corporate transparency among government suppliers: Implications for firm valuation

The impact of terrorism on Turkish financial markets: the sectoral approach

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