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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
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    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.

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    File URL: http://www.sciencedirect.com/science/article/B6VFF-50W80RN-1/2/372a31052a4b1a81ae06ea8fc050cfac
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    Article provided by Elsevier in its journal Pacific-Basin Finance Journal.

    Volume (Year): 19 (2011)
    Issue (Month): 1 (January)
    Pages: 1-20

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    Handle: RePEc:eee:pacfin:v:19:y:2011:i:1:p:1-20
    Contact details of provider: Web page: http://www.elsevier.com/locate/pacfin

    Keywords: Corporate governance Board structure Ownership structure Price volatility Overreaction;

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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.

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