IDEAS home Printed from https://ideas.repec.org/a/taf/glecrv/v47y2018i2p182-223.html
   My bibliography  Save this article

Do Stock Price Reactions to Public Information Reflect its Long-run Effect on the Firms’ Fundamental Value? The Case of an Emerging Market

Author

Listed:
  • Hyeonmi Ahn
  • Doyeon Kim

Abstract

This paper examines the relationship between the cumulative abnormal returns (CARs) induced by various events and long-term operating performances in the post-event period. We gather six events from KRX Disclosure System over 2000–2011 and then ascertain the different CAR patterns. While most of other studies have focused on a single type of events, we deal with various types of events. Based on the general valuation model, stock return or price should reflect the firm’s fundamental value and we expect CARs to show a close relationship with the firm’s fundamental value over a long horizon. However, no distinct relationship between CARs and operating performances is found. The stock price reactions which are temporary and unrelated to the firm’s fundamental values may be explained by market inefficiency in Korea.

Suggested Citation

  • Hyeonmi Ahn & Doyeon Kim, 2018. "Do Stock Price Reactions to Public Information Reflect its Long-run Effect on the Firms’ Fundamental Value? The Case of an Emerging Market," Global Economic Review, Taylor & Francis Journals, vol. 47(2), pages 182-223, April.
    • Handle: RePEc:taf:glecrv:v:47:y:2018:i:2:p:182-223
    DOI: 10.1080/1226508X.2018.1424011
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/1226508X.2018.1424011
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/1226508X.2018.1424011?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:glecrv:v:47:y:2018:i:2:p:182-223. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RGER20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.