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Stock price volatility and overreaction in a political crisis: The effects of corporate governance and performance

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  • Huang, Hsu-Huei
  • Chan, Min-Lee
  • Huang, I-Hsiang
  • Chang, Chih-Hsiang

Abstract

Stock price volatility increases in times of political crisis. In examining the effects of corporate governance and performance on price volatility and the market's overreaction during the political crisis triggered by the controversial Taiwan presidential election of 2004, our results show that companies with better corporate governance or performance experience less price volatility and less increase in volatility during such a crisis. Furthermore, the results show that corporate performance and ownership structure have significant effects on the stock price overreaction.

Suggested Citation

  • Huang, Hsu-Huei & Chan, Min-Lee & Huang, I-Hsiang & Chang, Chih-Hsiang, 2011. "Stock price volatility and overreaction in a political crisis: The effects of corporate governance and performance," Pacific-Basin Finance Journal, Elsevier, vol. 19(1), pages 1-20, January.
    • Handle: RePEc:eee:pacfin:v:19:y:2011:i:1:p:1-20
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    References listed on IDEAS

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    Cited by:

    1. Lee, Shih-Cheng & Lin, Chien-Ting & Chang, Pei-Ting, 2011. "An Ohlson valuation framework for valuing corporate governance: The case of Taiwan," Pacific-Basin Finance Journal, Elsevier, vol. 19(4), pages 420-434, September.
    2. repec:eco:journ1:2017-03-96 is not listed on IDEAS
    3. repec:eco:journ1:2017-03-31 is not listed on IDEAS
    4. Huang, Paoyu & Ni, Yensen, 2017. "Board structure and stock price informativeness in terms of moving average rules," The Quarterly Review of Economics and Finance, Elsevier, vol. 63(C), pages 161-169.

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