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AbstractThe purpose of this study is to investigate Chinese market reaction to environmental‐policy‐related announcements from the Chinese government in response to the Copenhagen Climate Summit from 2009 to 2011. Based on a market model with a newly developed bootstrapping significance testing methodology, we find that market reactions to these policy‐related announcements are significantly positive. Further, we test whether specific industry or firm characteristics can explain cross‐sectional variation in these market reactions. Our results show that market reactions are more significantly positive for high‐pollution industries than low‐pollution industries. The study contributes to the understanding of how investors respond to announcements related to the Copenhagen Climate Summit in the context of China. In contrast to prior studies that examine directly whether a firm's abnormal return or cumulative abnormal return is negatively affected by environmental regulations, we conduct this study in a distinct way in that our results show that an expectation of delayed carbon legislation will affect a firm's abnormal return positively, which indicates that the market is likely to respond negatively to an immediate implementation of carbon legislations.

Investors' perceptions of uncertainty have increased since Donald Trump's inauguration, primarily as a result of trade frictions. In the context of China-US trade frictions, this study investigates the joint effects of the actions of the parties and media tone on the Chinese stock market. The trade friction reports are classified into 12 groups based on two dimensions, that is, the actions of the parties and the tone of the state-controlled media. The result shows that the role played by the state-controlled media depends on the actions taken by both the parties, as well as the type of firms. Specifically, when the US took action, either launched attacks or made concessions, adopting a high tone played some role in boosting returns and curbing fluctuations; adjusting reporting strategies also played some role in elevating the liquidity of both types of firms and influencing domestic southbound investments. Market reactions were more influenced by the actions than the official attitudes when China made concessions or when both sides took action (attacks or concessions).

This study examines the motive for stock repurchase. We examine four hypotheses — undervaluation, signaling, free cash flow, and optimal leverage hypotheses — using both short-run and long-run market reactions. We find that the undervaluation hypothesis is most consistent with both short-run and long-run tests. Improvement in operating performance following repurchase suggests the signaling hypothesis. However, the signaling hypothesis is supported only in the long-run test, not the short-run test, suggesting that market underreaction exists to the signaling initially. Of the control variables, the target purchase ratio and ownership by the largest shareholders are found significant, suggesting that the magnitude of repurchase and the ownership increase motive by the largest shareholders are also important factors that explain the repurchase.

In this paper, we exam how the financial markets reacted to the emergence of the Dodd-Frank Wall Street Reform and Consumer Protection Act as it developed through the legislative process from policy concept to signed law. We find that investors, on the one hand, desired clarity and sustainable oversight of market activities, but simultaneously feared the possibility of over-burdensome regulation. As the legislative process developed, markets cheered any watering down of perceived over-restrictive provisions with a positive response. We also empirically noted the smaller banks stocks were generally unaffected by the entire emergence of Dodd-Frank, with nearly all of the market reaction (positive and negative) occurring with larger banks stocks.

PurposeThe purpose of this study is to look at the market reaction to stock dividend announcements of real estate investment trusts (REITs) and further look at their determinants.Design/methodology/approachThe paper uses standard event methodology for market reaction to determine abnormal returns and CARs. Additionally the paper uses a logistic regression to analyze determinants.FindingsUsing a sample of 37 announcements from fourth quarter 2008 till first quarter 2010, the paper finds a mean negative abnormal return of −1.23 percent on the day of the announcement. Further, following the announcement day, the paper finds a weak significant positive abnormal return on the day after that (+1), which may convey some optimism from the investors. Further, when the paper looks at the characteristics of such REITs, it finds that REITs with higher leverage ratio and larger asset bases are more likely to issue stock dividend. Additionally, the results also indicate that the stock dividend announcement lead to an abnormal turnover of 0.24 percent for these REITs on the day following the announcement. This may suggest an increase in the marketability of the stock dividend REITs after the announcement date.Practical implicationsFirst, the reaction of the market will help gauge the response of investors to such announcements. This could provide REIT managers information on ex‐ante investor reaction to such dividend decisions. Second, this study will help identify the characteristics of REITs that declare stock dividends. For investors who rely on market trading information, study in this regard will help them to build up their portfolios.Originality/valueThis is the only study that looks exclusively at stock dividends in REITs and the second study to look at stock dividends in REITs in general. It is different from the other study in this field because of its methodology, sample size and some distinct results.

The main aim of this article is to assess the influence of change in Prime Minister on Polish stock market. Prime Minister Szydło resigned shortly after she survived the second vote of no confidence on December 8, 2017, and was replaced by Morawiecki, the Vice-Prime Minister and Minister of Finance, and a former CEO of a large bank.1 Considering the aforementioned context, this study tests four hypotheses regarding the market reaction in terms of companies' shareholder structure. An event study analysis was performed to calculate cumulative abnormal returns, and regression models were estimated to test the hypotheses. The author finds significant negative price changes only for stateowned enterprises (SOEs) both directly and indirectly controlled by the government. I assume that this reaction in the case of SOEs was caused by the uncertainty related to the likely changes in the management.

Several researchers have recently shown an interaction between macroeconomic variables and stock returns. Most of these studies have concentrated on interest rates and inflation. These and other variables, of course, have an influence on the debt markets as well. Other variables that can influence the debt and equity markets include employment information. On the first Friday of each month the government releases its employment report for the previous month. Strong growth in employment generally bodes well for economic output and growth in the economy. Any inflation and interest rate implications of a strong employment report will ultimately be reflected in bond and stock prices. It is generally observed that if payroll employment growth is moderately strong prices in the bond market drop while prices in the stock market rise. The empirical evidence presented supports these observations. This study documents the reaction of the bond and the stock markets in response to the employment reports. As the unemployment rate tends to rise so do the bond and the stock markets.

Finance Minister Pranab Mukherjee on Friday 26 February, 2010 came out with a Union Budget 2010 that could be described as a fine balancing act. The Union Budget 2010 managed to spring up quite a f ew surprises. With the Indian Stock Markets anxiously waiting for the budget, it was a stock market friendly budget to say the least. While a lower fiscal deficit in the financial year ahead, resulting in a lower government borrowing, soothed the stock markets' nerves, an overhauled personal tax structure provided relief to individual taxpayers. Not surprisingly, stock markets gave a rousing welcome to the Budget and rose immediately as the FM presented his speech.