Industry Distress Level and Competitor’s Annual Stock Return

DOI

10.2991/aebmr.k.201222.019How to use a DOI?

Keywords

Financial distress, Intra-Industry Information Transfer, Contagion Effect, Financing And Investment

Abstract

Previous studies show that bankruptcy announcements have a significant effect towards competitor’s stock return around the bankruptcy announcement date. This study tries to fill the gap to investigate whether prior to bankruptcy, distressed firms already have significant effect on other players in the same industry. Thus, this research aims to examine the effect of industry distress level towards competitor’s annual stock return in the same industry. This study uses Altman Z Score to measure financial distress and categorized the firms as “distressed” and “non distressed” firms. Moreover, this study employs panel data regression tests to 142 non-distressed firms in 2009-2018 listed in Indonesian Stock Exchange. The results suggest that the effect of industry distress level towards competitor’s annual stock return is significant. These findings contribute to the literature on financial distress, contagion effect, financing and investment.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Adella Kurnia Sari
AU  - Dwi Nastiti Danarsari
PY  - 2020
DA  - 2020/12/23
TI  - Industry Distress Level and Competitor’s Annual Stock Return
BT  - Proceedings of the International Conference on Business and Management Research (ICBMR 2020)
PB  - Atlantis Press
SP  - 130
EP  - 136
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.201222.019
DO  - 10.2991/aebmr.k.201222.019
ID  - Sari2020
ER  -