What drives the market value of firms in the defense industry
AbstractThis paper investigates the relative importance of different types of news in driving significant stock price changes of firms in the defense industry. We implement a systematic event study with a sample of the 58 largest publicly listed companies in the defense industry, over the time period 1995-2005. We first identify, for each firm, the statistically significant abnormal returns over the time period, and then we look for information releases likely to cause such stock price movements. We find that stock price movements in the defense industry are, in many ways, influenced by the same events as in other industries (key role of formal earnings announcements or analysts' recommendations) but this industry also has some specific features, in particular the influence of geopolitical events and the relevance and frequency of bids and contracts on stock prices.
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Bibliographic InfoArticle provided by Elsevier in its journal Review of Financial Economics.
Volume (Year): 17 (2008)
Issue (Month): 1 ()
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Web page: http://www.elsevier.com/locate/inca/620170
Other versions of this item:
- Gunther Capelle-Blancard & Nicolas Couderc, 2006. "What drives the market value of firms in the Defense industry ?," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00115655, HAL.
- Gunther Capelle-Blancard & Nicolas Couderc, 2005. "What drives the market value of firms in the Defense industry ?," Cahiers de la Maison des Sciences Economiques bla06037, Université Panthéon-Sorbonne (Paris 1), revised Apr 2006.
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- L64 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Machinery; Business Equipment; Armaments
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