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- W1524516360 abstract "Using an event-study framework, we examine the stock market reaction to the announcement of firm withdrawal from countries designated as “State Sponsors of Terrorism” by the U.S. Department of State. We find that such announcements are, on average, linked to a statistically significant increase in firm value -- an effect which starts already a few days before the announcement date. The observed abnormal returns are positively associated with U.S. domicile, the intensity of a firm’s engagement in a designated country, the number of countries that it withdraws from as well as with a withdrawal from Iran compared to a withdrawal from other countries. Evidence suggests an increase in demand for stocks of withdrawing firms as a plausible cause of the positive stock price reaction. Pension and endowment funds are significantly less likely to own majority stakes in firms with intensive involvements in countries designated as “State Sponsors of Terrorism”. We find some statistical evidence that firms remaining active in such countries have abnormally positive returns in the long run." @default.
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- W1524516360 date "2012-01-01" @default.
- W1524516360 modified "2023-09-30" @default.
- W1524516360 title "Stock Market Reaction to Firm Withdrawal from State Sponsor of Terrorism Countries − Punishment for Foregone Business Opportunities or Reward for Ethical Behaviour?" @default.
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- W1524516360 doi "https://doi.org/10.2139/ssrn.1980059" @default.
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