Open AccessIs the market swayed by press releases on corporate governance? Event study on the Eurostoxx banks
Author(s) -
Marina Brogi,
Valentina Lagasio
Publication year - 2018
Publication title -
corporate ownership and control
Language(s) - English
Resource type - Journals
eISSN - 1810-0368
pISSN - 1727-9232
DOI - 10.22495/cocv15i3art2
Subject(s) - corporate governance , accounting , business , event study , stock market , index (typography) , stock (firearms) , financial system , economics , finance , engineering , mechanical engineering , paleontology , context (archaeology) , horse , world wide web , computer science , biology
Are press releases on Corporate Governance price sensitive? What is the impact of Corporate Governance information on stock prices of banks? This paper addresses these questions by applying an event study methodology on 70 press releases published by the Euro area banks listed on the Eurostoxx banks Index, from 2007 to 2016. Systemic shocks are explored as well idiosyncratic ones. Our results show that investment decisions are significantly but negatively influenced by the disclosure of a press release on corporate governance as if this kind of news leads investors to perceive the banks’ prospects negatively. The best of our knowledge this is the first paper that investigates European banks press releases on corporate governance. Findings are relevant for banks’ management and their disclosure policy. Nonetheless, further research is needed to investigate differences and similarities between an area of governance disclosure and another.