Spin-off and market reaction: what is The Wall Street Journal role?. (2016)

• Record Type: Journal Article
• Authors: Graziano, Elvira Anna
• Is Part Of: International journal of markets and business systems. Volume 2:Number 2(2016)
• Page Start: 157
• Page End: 170
• Publication Date: 2016
• Subjects: restructuring -- spin-offs -- media -- business systems -- event study -- systems thinking -- market reaction -- financial market structure -- investor behaviour -- abnormal returns -- newspapers -- stock prices -- financial markets -- stock markets; Business -- Periodicals; Markets -- Periodicals; System theory -- Periodicals; Organizational behavior -- Periodicals; Industrial management -- Periodicals; 658.4032
• Languages: English
• ISSNs: 2056-4112

Abstract

Building on the pioneering study by Covey (1999), this paper addresses a central question: according to the iceberg model of system thinking, can media play a relevant role in the financial market structure and hence influence the behaviour of investors? This study identifies specialised press as a key-player in the financial market. Through analysis with an event study approach, the effect of publication of spin-off news in The Wall Street Journal (WSJ) between 2000 and 2013 on the abnormal returns of 179 listed companies has produced the following results: 1) top newspapers seem to affect stock prices while not providing any new information, when publication follows the announcement; 2) top newspapers have a significant impact on the behaviour of investors, when the publication of news precedes the spin-off announcement.