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The Stock Market Reaction to Plant Closings

The Stock Market Reaction to Plant Closings This paper is an event time study of the valuation effects of a sample of eighty‐two permanent plant closings. The traditional approach to project termination decisions suggests that common stock prices should increase around the date on which firms publicly announce the termination of a project. However, the empirical results of this study indicate that, on average, no significant changes in share holder wealth are associated with the closing down of capital assets. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png American Journal of Business Emerald Publishing

The Stock Market Reaction to Plant Closings

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Publisher
Emerald Publishing
Copyright
Copyright © 1993 MCB UP Ltd. All rights reserved.
ISSN
1935-5181
DOI
10.1108/19355181199300009
Publisher site
See Article on Publisher Site

Abstract

This paper is an event time study of the valuation effects of a sample of eighty‐two permanent plant closings. The traditional approach to project termination decisions suggests that common stock prices should increase around the date on which firms publicly announce the termination of a project. However, the empirical results of this study indicate that, on average, no significant changes in share holder wealth are associated with the closing down of capital assets.

Journal

American Journal of Business – Emerald Publishing

Published: Jan 1, 1993

Keywords: Valuation effects; Plant closings; Project termination decisions

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