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Efficiency and stock returns: Evidence from the insurance industry

  • Gaganis , Chrysovalantis

    ()

    (Department of Economics, University of Crete, Greece)

  • Hasan, Iftekhar

    ()

    (Schools of Business, Fordham University and Bank of Finland)

  • Pasiouras , Fotios

    ()

    (Surrey Business School, University of Surrey, UK, and Financial Engineering Laboratory, Technical University of Crete, Greece)

This study investigates whether the capital market values the efficiency of firms. After tracing stock returns and efficiency changes of 399 listed insurance firms in 52 countries during the 2002-2008 period, the paper reports a positive and statistically significant relationship between profit efficiency change and market adjusted stock returns. However, there is no robust evidence that cost efficiency change is associated with stock returns.

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File URL: http://www.suomenpankki.fi/en/julkaisut/tutkimukset/keskustelualoitteet/Documents/BoF_DP_1314.pdf
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Paper provided by Bank of Finland in its series Research Discussion Papers with number 14/2013.

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Length: 33 pages
Date of creation: 16 Aug 2013
Date of revision:
Handle: RePEc:hhs:bofrdp:2013_014
Contact details of provider: Postal: Bank of Finland, P.O. Box 160, FI-00101 Helsinki, Finland
Web page: http://www.suomenpankki.fi/en/

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