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


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


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.

Suggested Citation

  • Beatriz Cuellar Fernandez & Yolanda Fuertes Callen & Jose Antonio Lainez Gadea, 2011. "Stock Price Reaction to Non-financial News in European Technology Companies," European Accounting Review, Taylor & Francis Journals, vol. 20(1), pages 81-111.
  • Handle: RePEc:taf:euract:v:20:y:2011:i:1:p:81-111
    DOI: 10.1080/09638180903384650

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    References listed on IDEAS

    1. Andreas C. Soteriou & Stavros A. Zenios, 2000. "Searching for the Value of Quality in Financial Services," Center for Financial Institutions Working Papers 00-39, Wharton School Center for Financial Institutions, University of Pennsylvania.
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