Proceedings of the 6th International Conference on Tourism, Economics, Accounting, Management, and Social Science (TEAMS 2021)

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Investor’s Reaction to Corporate Action Announcement: New Product and System and Technology Innovation

Authors
Juniarti Juniarti1, *, Novita Tenoyo1, Dea Devina Theja1
1Department of Business Accounting, Petra Christian University, Surabaya, Indonesia
*Corresponding author. Email: d12180241@john.petra.ac.id
Corresponding Author
Juniarti Juniarti
Available Online 25 November 2021.
DOI
10.2991/aebmr.k.211124.060How to use a DOI?
Keywords
Corporate actions; Investor’s response; New product; System and technology innovation; Cumulative abnormal return; Automotive sector
Abstract

This study aims to know how investors react to corporate action announcements and to which categories that investors react more positively to. This study differs from previous studies because we use three different event windows to calculate CAR, which are [+2, 0, -2], [+1, 0, +1], [-1, 0]. We also use firm size, market share, and market capitalization as control variables. Based on 201 samples in the period of 2020 by auto manufacturing firms in East Asia, we find that there is a significant difference of CAR between the firms that do and don’t do corporate actions. Based on 148 corporate action announcements, we find that the new product category is responded more positively by investors than the system & technology innovation category. Besides that, we also find that firm size significantly affects investor’s response, where large firms get more positive response from investors than small firms. The larger the size of the firm means that the firm has more resources and experiences, which give large firms more opportunities to successfully do corporate action. That reason makes investors interested to invest in large firms because they believe that large firms have better business prospects in the future. This study examines investor’s response to corporate action announcements only in the automotive sector. Other sectors’ results may differ from this study; therefore, future research has the opportunity to follow up on these issues.

Copyright
© 2021 The Authors. Published by Atlantis Press International B.V.
Open Access
This is an open access article under the CC BY-NC license.

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Volume Title
Proceedings of the 6th International Conference on Tourism, Economics, Accounting, Management, and Social Science (TEAMS 2021)
Series
Advances in Economics, Business and Management Research
Publication Date
25 November 2021
ISBN
978-94-6239-465-0
ISSN
2352-5428
DOI
10.2991/aebmr.k.211124.060How to use a DOI?
Copyright
© 2021 The Authors. Published by Atlantis Press International B.V.
Open Access
This is an open access article under the CC BY-NC license.

Cite this article

risenwbib
TY  - CONF
AU  - Juniarti Juniarti
AU  - Novita Tenoyo
AU  - Dea Devina Theja
PY  - 2021
DA  - 2021/11/25
TI  - Investor’s Reaction to Corporate Action Announcement: New Product and System and Technology Innovation
BT  - Proceedings of the 6th International Conference on Tourism, Economics, Accounting, Management, and Social Science (TEAMS 2021)
PB  - Atlantis Press
SP  - 417
EP  - 429
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.211124.060
DO  - 10.2991/aebmr.k.211124.060
ID  - Juniarti2021
ER  -