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Stock Price Reaction to Non-financial News in European Technology Companies

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  • Beatriz Cuellar Fernandez
  • Yolanda Fuertes Callen
  • Jose Antonio Lainez Gadea
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    Abstract

    In this paper we examine investors' valuation of non-financial corporate news items issued by European companies in the information and communications technology industry. We analyse the stock market reaction to the publication of press releases on a sample of 145 firms from 2003 to 2005. Results indicate that investors react positively to information concerning a firm's capacity to consolidate its position, diversify and grow. Investors react negatively to information about new product launches and upgrades. We also find that investors in companies with a strong market position and growth prospects highly value information on takeovers and internationalisation. In contrast, investors in low-performing companies value news of disposals and distribution alliances. Our results enhance the general understanding of the relevance of non-financial information to investors, and contribute to the debate surrounding the usefulness of publishing non-financial information.

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    File URL: http://www.tandfonline.com/doi/abs/10.1080/09638180903384650
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    Bibliographic Info

    Article provided by Taylor & Francis Journals in its journal European Accounting Review.

    Volume (Year): 20 (2011)
    Issue (Month): 1 ()
    Pages: 81-111

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    Handle: RePEc:taf:euract:v:20:y:2011:i:1:p:81-111

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