The technology industry is characterized by a greater than usual reliance on intangible assets. During the tech bubble many firms were valued entirely on intangible assets and growth prospects. In the aftermath of the bubble, intangible assets still play an important role as the innovative performance of a firm’s human capital and the value of its patents creates much of the value of high-tech firms. The problem of transferring human capital and knowledge may be further exacerbated when the firms belong to separate national cultures. Investor perception of acquisition announcements may be more favourable if the target workforce is much smaller relative to the bidder, and thus easier to integrate. Also, perceptions may be favourable when the target has a high ratio of intangible assets to total assets, as this may be a proxy for the relative value of the extractible intangible assets. This study uses a sample of 61 acquisition announcements between 1991 and 2004, where both acquirer and target are high-tech firms and accounting and trading data is available from three years prior to three years after the acquisition announcement. There is weak evidence to support the employee ratio hypothesis for bidder returns, and no evidence to support the intangible assets to total assets hypothesis for either bidder or target returns. Additionally, it is found that average bidder abnormal returns during the announcement period (as measured from one day prior to the announcement acquisitions to one day afterwards) are negative but not significantly different from zero, and that average target abnormal returns are positive and significant. Average wealth gains to bidders are negative and to targets are positive over the window from five days prior to the acquisition announcement to five days afterwards. Furthermore, combined wealth gains are negative, indicating the synergistic gains from high-tech cross-border acquisitions are offset by high premiums paid by the bidders for the targets. Relatedness, a lack of tender offers, and non-US acquirer status are demonstrated to be related to negative returns to bidders, whereas tender offers, US-acquirer status, and termination provisions are shown to be related to increased returns to target shareholders. In the long-run, it is found that acquirers experience superior operating cash flow returns when compared to their industry peers, however, the acquirer experiences diminished performance when compared to the combined performance of the pre-acquisition acquirer and target firms.

Experiencing malevolent acts is a common feature when conducting business in parts of the developing world, but the effects that these acts have on a firm’s stock price have not received sufficient attention by the literature. Filling the gap, this thesis looks at the oil industry in Nigeria and the effects of multiple malevolent acts over a five year period (ranging from 2006 to 2010) on the stock prices of the four major international oil firms operating therein: Shell, Chevron, Exxon, and Total. The stock price data was presented in the form of abnormal returns, the difference in stock price from the expected price. Ordinary least squares regression as well as Wilcoxian sign-rank techniques were used to test the abnormal returns data for our firms. This data was segregated by firm name as well as by event types to isolate the effects that each has on the returns of the firms under study. This thesis raises several hypotheses, such as that a negative event in general will lead to negative returns and that negative events affecting one firm will lead to positive returns for that firm’s competitors. We managed to determine that the only event types that had a significant impact on any firm’s returns were kidnappings and government policies (either political or economic) targeted to harm the firms. We discovered that kidnapping events affected Shell’s returns negatively, whereas they have positive impact on the returns of Chevron and Exxon. We postulate that the latter results are a reaction to the relatively strong negative effect on Shell’s returns. In response to negative government actions, Shell and Total experienced positive returns , we postulate that this is due to the market’s perception that these policies will lead to less supply and consequently to higher prices for Nigerian oil. Our results indicate that violent events have no impact, at least on the four major firms, whereas kidnappings and government policies do.

Purpose: The main objective of this study is to research whether an announcement of an acquisition generates positive/negative abnormal short-term return towards the buying company’s shareholders. The secondary purpose is to research whether any differences could be due to selected factors: firm size and industry. Method: The study is quantitative in nature where the research aims at the stock price movement around the announcement of an acquisition. The sample size includes 30 companies between the years 2000-2010. The abnormal return is investigated by an Event Study. Conclusion: Our study shows that the publication gives a positive abnormal return in comparison to the respective sector indexes. The result is statistically significant, so we can conclude that an announcement of an acquisition is a positive investment on average. We also found that our selected factors have a significant impact on price performance. Medium-sized industrial companies show positive abnormal returns while smaller IT companies shows a very low abnormal return and large finance companies fluctuates slightly more than other variables, but the value changes are minimal. We also found that the market does not work effectively because of the strange movements before and after the event date.

A financial failure prediction model should be dynamic by adding latest information in an effort to improve the current predictive power, and this model also can be applied to different industries and periods. That is, it has prominent goodness of fit and stable parameter. In this study, I testify that if the modified independent variables, industry relative ratios, can improve the prediction rate by using logistic regression. My research is based on public information. This study constructs two kinds of model¡GModel I is constructed with original financial ratios and Model II with relative industry ratios. Both models incorporate additional variables related to corporate governance. My empirical results suggest that relative industry ratios enhance the predictive power of financial failure prediction within three partially overlapping periods. Further study focus on Model II, I isolated firms which are confronted with financial difficulties and they can¡¦t be discriminated from other normal firms by using the prediction model. My result demonstrates that the main difference between the former and the latter is debt/equity ratio. Those firms which can¡¦t be detected afford less liability. In addition, my studies also compare these undetected firms with their control group and find they still can be distinguished from their control group by using logit model. The accuracy rate of prediction can reach 92.42%. Last study we use event study to research the links between the default possibilities of firms and their stock prices. My results demonstrate that the default possibilities may cause abnormal returns.

Analyzing different aspects of the supply chain aids in understanding how firms behave, interact and respond within an industry. Some concepts used to carry out this analysis include asymmetric price transmission, event study methodology and event costing analysis. Each of these topics is discussed in this dissertation, presented as a set of three separate papers. The first paper analyzes asymmetric price transmission and elasticities of price transmission at the farm-retail level for whole and two percent milk in selected cities in the United States. The theoretical core of this paper relies on a comparison between the traditional Houck approach and the error correction model proposed by von Cramon- Taubadel and Fahlbusch. We reject the null hypothesis of symmetry for each product and city under both approaches. We also find little evidence of statistical superiority between the classic Houck approach and the error correction model. The second paper uses financial market event study methodology to calculate the economic impact on the supply chain related to one of the worst disease outbreaks in the food industry in the United States. This event began on November 3, 2003, when the Associated Press reported a hepatitis advisory in the Beaver Valley, Pennsylvania. This outbreak directly involved two publicly traded companies: Prandium and Sysco. The market model is used as the main foundation of the economic analysis. There is no evidence of abnormal rates of return or spillover effects in relation to the outbreak. However, there is evidence that volatility of returns increases after the event. The third paper develops a general conceptual economic module to quantify the impact of an animal disease outbreak. This study develops a generic economic module, which estimates cost in the face of a simulated animal disease outbreak under different mitigation strategies. This model was subsequently applied in a case study: a hypothetical case of a foot-and-mouth (FMD) outbreak in the Texas Panhandle analyzed under five different ex-post mitigation strategies. The results show that the most effective strategy is to slaughter and not to vaccinate. We conclude that analyzing the supply chain is important in understanding how markets behave.

A recent outbreak of bird flu or avian influenza (AI), an especially highly pathogenic strain (HPAI) of H5N1, started in Hong Kong in January 2003 and caused 159 human deaths in Asia, Africa and Europe through early 2007. In addition, this outbreak resulted in millions of slaughtered birds and banned international trade of poultry meat in the infected countries. Such events harmed the poultry, tourism, and other related industries in the infected countries and changed the world poultry trade flow. Even in some uninfected countries, related industries were negatively affected. This study investigates the impact of bird flu outbreaks as manifested in financial markets within the US and Japan. The first essay explores how the avian influenza (AI) outbreaks impacted the security values of poultry-related firms. Using partial equilibrium analysis, this study infers that within a country AI outbreaks drop stock prices of poultry meat producers and raise stock prices of poultry food producers. Simultaneously, we infer that AI outbreaks in other poultry exporting countries raise stock prices of poultry meat producers and drop stock prices of poultry food producers. The empirical findings support our model results. Recent developments in time series method, directed graphs and search methods of cointegration rank are applied in this study. The second essay examines whether avian influenza outbreaks cause structural breaks in a model of their prices. It employs the dynamic programming algorithm and the reduced regression method for a cointegrated vector autoregressive (VAR) model to compute the break dates for the data sample. This research then compares the long run relation, and the short run relation and contemporaneous relation. The model estimations in these three sub-periods find these three sub-samples are significantly different. The breaks were caused by the invasion of Iraq on March 2003 and the 20 Bovine Spongiform Encephalopathy (BSE) induced ban of Canadian live cattle imports to the US on 03 March 2005, not by avian influenza outbreaks in early 2004. The third essay explores the effects of the avian influenza announcement in Japan on the prices of agricultural commodity futures contracts traded in Japan. Both the VAR model with asymmetric generalized autoregressive conditional heteroskedastic (GARCH) terms and the event study methods were used to examine whether avian influenza outbreaks significantly affected these markets. Our findings point out that the avian influenza outbreak only impacted the egg futures contract. These three essays found that outbreaks of avian influenza have significant impact on poultry-related stock prices and futures markets. The examined impacts changed the movement of those financial equity prices in the short run, but not in the long run. Research showed investors and poultry-related producers still encounter huge financial risk and loss.

The Company often enlarge its scale to maintain its competitive advantage by investing. When company lacks of internal funds, it will raise funds from outside. The purpose of this study is to explore how company chooses financial instruments and influence of the announcement effect on stock price. This study analyzes Taiwan listed company by the the sample period from 1993 to 2005. There are two parts of the thesis. The first is the factor of choosing certain financial instrument. We use logistic regression model, both binary and multinomial, to figure it out. The second is the influence of the announcement effect has on the stock price. We use event study to find whether abnormal return exists. Conclusion: 1. If the company¡¦s size is larger, it will choose debt to raise funds. 2. If R&D expense relative to net sales, debt ratio, the proportion of intangible asset are higher, the company will be tend to raise funds by choosing convertible bond 3. If the stock price is overvalued, the company will choose stock. 4. Taiwan listed company will experience negative stock return whatever it chooses stock, debt, or convertible bond.

This study examines the market reaction to rights offering announcements in Turkey. Even though the topic is extensively studied in the finance literature, there is still research going on for emerging markets. The first part of this study measures market reaction to rights offering announcements for six different information arrival dates. The results are significantly negative except for the case of the announcement of the rights offering period. Additionally, the sample is divided into two sub-periods as before and after the 2001 crisis. The results show that there is a significant difference in market reaction and this difference is attributed to the change in economic policy after the 2001 crisis. The second part of the study examines the determinants of this market reaction and the findings suggest that bonus issues are positively related and there is also evidence that firms time their equity issues. The third part analyzes the long term performance of equity issuing firms in two subgroups as financial and non-financial firms. The results provide evidence of a negative performance and this finding is consistent with the results of previous studies.

Extant literature finds that long-term abnormal stock returns are generated by a strategy based on corporate governance index values (Gompers, Ishii, and Metrick 2003). The result is inconsistent with efficient markets and suggests that information about governance is not accurately reflected in market data. Control firm portfolios are used to mitigate model misspecification in measuring long-term abnormal returns. Using a number of different matching criteria and governance indices, no long-term abnormal returns are found to trading strategies based on corporate governance. The effect of a change in governance on firm value is mixed, but some support is found for poor governance destroying firm value. These results have a number of implications for practitioners, researchers, and policy makers.

From 2008, employee stock bonus must debt expense according to national law and policy. How to get balance between employees and shareholders without eroding benefits becomes the most difficult challenge to many enterprises. The employee stock bonus has been implemented in Taiwan for a long time. This system does play a significant role in high-tech industry and make a great contribution to Taiwan¡¦s economics. However, since a series of business scandals starting with Enron case in 2001, this unique system has been broadly discussed and caused serious debates. One of the most controversial arguments claims that employee stock bonus will weaken the stock price and hurt equity. The study is based on pooled time-series data during 1998-2007 from the IC industry corporations trading on the Taiwan Stock Exchange Corporation and Over-The-Counter market. The purpose is to examine the impact of employee stock bonus on Taiwan stock market by analyzing the variation in Cumulative Average Abnormal Revenue (CAR). The empirical results are summarized as follows: 1.With the factor of employee stock bonus, the ex-dividend effects still existed in IC industry of Taiwan stock market. The negative CAR was particular in evidence on the three days prior to the ex-date. There were no obvious trends of ex-dividend effects during this decade. Both employee stock bonus and dividends were declined year by year which represented that corporation had adjusted their policy with a downward tendency. 2.Before the ex-date, the group of moderate employee stock bonus was beneficial to the CAR and created better performance of stock price with the least dilution effect. On the contrary, the group of low employee stock bonus came out the worst performance. After the ex-date, the group of high employee stock bonus exhibited the best ex-dividend effects and sustained the performance longer. But the group of low employee stock bonus still performed poorly with the most negative CAR. Base on above findings, employee stock bonus not really hurt the stock price but benefit equity if corporations use this system adequately. High employee stock bonuses maybe deliver a positive signal which implicates a bright future.