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How stock markets react to regulatory sanctions? Evidence from France

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  • Thierry Kirat
  • Amir Rezaee

Abstract

Our study of how the stock market reacts to sanction announcements by the French financial regulator from 2004 to 2017 finds that the market reacts negatively when a sanction is announced in the press. Cross-sectional regression models show that the penalties are too low to influence market reactions. Our results suggest that after the financial crisis of 2008, a plethora of news on financial wrongdoings has desensitized markets to announcements of sanctions against large companies.

Suggested Citation

  • Thierry Kirat & Amir Rezaee, 2019. "How stock markets react to regulatory sanctions? Evidence from France," Applied Economics, Taylor & Francis Journals, vol. 51(60), pages 6558-6566, December.
    • Handle: RePEc:taf:applec:v:51:y:2019:i:60:p:6558-6566
    DOI: 10.1080/00036846.2019.1644443
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    Cited by:

    1. Laure Batz, 2023. "Financial market enforcement in France," European Journal of Law and Economics, Springer, vol. 55(3), pages 409-468, June.
    2. Laure Batz, 2020. "Financial impact of regulatory sanctions on listed companies," European Journal of Law and Economics, Springer, vol. 49(2), pages 301-337, April.
    3. Laure, de Batz, 2020. "Financial crime spillovers. Does one gain to be avenged?," Journal of Economic Behavior & Organization, Elsevier, vol. 173(C), pages 196-215.
    4. Laure de Batz & Evžen Kočenda & Evžen Kocenda, 2023. "Financial Crime and Punishment: A Meta-Analysis," CESifo Working Paper Series 10528, CESifo.
    5. Artem Stopochkin & Inessa Sytnik & Janusz Wielki & Nataliia Zemlianska, 2021. "Methodology for Building Trader's Investment Strategy Based on Assessment of the Market Value of the Company," European Research Studies Journal, European Research Studies Journal, vol. 0(1), pages 913-935.

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