IDEAS home Printed from https://ideas.repec.org/p/hal/journl/halshs-00305380.html

What drives the market value of firms in the defense industry?

Author

Listed:
  • Gunther Capelle-Blancard

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Nicolas Couderc

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

This article assesses the relative importance of different types of news in driving significant stock price changes in the defense industry. We implement a systematic event study with the 58 largest publicly listed companies in the defense industry, over the time period 1995–2005. We first identify, for each firm, the statistically significant abnormal returns over the time period. Then, we look for information releases likely to cause such stock price movements. Most of the key drivers in the defense industry are the same as in other industries (key role of formal earnings announcements and analysts' recommendations) but we also identify some specific features, in particular the influence of geopolitical events and the relevance and frequency of bids and contracts on stock prices. Finally, we examine the impact of the September 11 terrorist attacks on defense firms.

Suggested Citation

  • Gunther Capelle-Blancard & Nicolas Couderc, 2008. "What drives the market value of firms in the defense industry?," Post-Print halshs-00305380, HAL.
    • Handle: RePEc:hal:journl:halshs-00305380
    DOI: 10.1016/j.rfe.2007.02.001
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gurdgiev, Constantin & Henrichsen, Aaron & Mulhair, Andrew, 2022. "The budgets of wars: Analysis of the U.S. defense stocks in the Post-Cold War era," International Review of Economics & Finance, Elsevier, vol. 82(C), pages 335-346.
    2. Merkl-Davies, Doris M. & Koller, Veronika, 2012. "‘Metaphoring’ people out of this world: A Critical Discourse Analysis of a chairman's statement of a UK defence firm," Accounting forum, Elsevier, vol. 36(3), pages 178-193.
    3. Bouri, Elie & Quinn, Barry & Sheenan, Lisa & Tang, Yayan, 2024. "Investigating extreme linkage topology in the aerospace and defence industry," International Review of Financial Analysis, Elsevier, vol. 93(C).

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L64 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Machinery; Business Equipment; Armaments

    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:hal:journl:halshs-00305380. 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: CCSD (email available below). General contact details of provider: https://hal.archives-ouvertes.fr/ .

    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.