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Stock Market Reaction to Capital Investment Decisions: Evidence from Business Relocations

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  • Chan, Su Han
  • Gau, George W.
  • Wang, Ko

Abstract

We investigate the stock market reaction to 447 announcements of business relocation decisions in the 1978–1990 period. We find that the stock market reaction to such decisions is tied to the motive for the relocation and the implied prospects for the firm, with the type of facility being relocated playing an insignificant role. Our finding reconciles several results in the literature concerning the stock market reaction to announcements of capital investment decisions.

Suggested Citation

  • Chan, Su Han & Gau, George W. & Wang, Ko, 1995. "Stock Market Reaction to Capital Investment Decisions: Evidence from Business Relocations," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 30(1), pages 81-100, March.
  • Handle: RePEc:cup:jfinqa:v:30:y:1995:i:01:p:81-100_00
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