Open AccessHome Health Care Services: A Look At Audit Opinion Announcements And The Contagion Or Competitive Effect On Rival Firms
Author(s) -
R. Stephen Elliott,
Mark Schaub
Publication year - 2011
Publication title -
journal of business and economics research
Language(s) - English
Resource type - Journals
eISSN - 2157-8893
pISSN - 1542-4448
DOI - 10.19030/jber.v2i5.2883
Subject(s) - stock (firearms) , audit , style (visual arts) , demographic economics , stock exchange , population , health care , monetary economics , economics , business , labour economics , accounting , finance , demography , sociology , engineering , mechanical engineering , archaeology , history , economic growth
With the aging of the American population and the increase in demand for health care services, we can expect an increase in investment activity in the health care market. This study focuses on whether intra-industry information transfers from going-concern audit opinion announcements create contagion or competitive stock price reactions in rival home health care firms. Data are derived from a sample of firms traded on the NASDAQ, the New York Stock Exchange, or the American Stock Exchange. Average standardized abnormal returns for each firm are computed during an 8-year period. The findings suggest a dominating competitive effect for rival home health care and miscellaneous home service firms significant at the .05 level.