The Effects of Rate Regulation on Mean Returns and Non-Diversifiable Risk: The Case of Cable Television

The Effects of Rate Regulation on Mean Returns and Non-Diversifiable Risk: The Case of Cable... Anticipated effects of rate controls are best observed in abnormalreturns in sectors providing complements and substitutes to the sector targeted for regulation. Further, risk may rise in response to rate controls, increasing the cost of capital and lowering investment. We examine stock price movements during events tied to the 1992 Cable Act, which reinstituted price controls on U.S. cable TV operators. We find strong evidence that controls were not anticipated to lower quality-adjusted cable rates. In addition, the uncertaintyof the policy led to substantially increased stock betas in some sectors. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

The Effects of Rate Regulation on Mean Returns and Non-Diversifiable Risk: The Case of Cable Television

Loading next page...
 
/lp/springer_journal/the-effects-of-rate-regulation-on-mean-returns-and-non-diversifiable-BjSUFEZZHI
Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2001 by Kluwer Academic Publishers
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1023/A:1011123915064
Publisher site
See Article on Publisher Site

Abstract

Anticipated effects of rate controls are best observed in abnormalreturns in sectors providing complements and substitutes to the sector targeted for regulation. Further, risk may rise in response to rate controls, increasing the cost of capital and lowering investment. We examine stock price movements during events tied to the 1992 Cable Act, which reinstituted price controls on U.S. cable TV operators. We find strong evidence that controls were not anticipated to lower quality-adjusted cable rates. In addition, the uncertaintyof the policy led to substantially increased stock betas in some sectors.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Oct 3, 2004

References

You’re reading a free preview. Subscribe to read the entire article.


DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 12 million articles from more than
10,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Unlimited reading

Read as many articles as you need. Full articles with original layout, charts and figures. Read online, from anywhere.

Stay up to date

Keep up with your field with Personalized Recommendations and Follow Journals to get automatic updates.

Organize your research

It’s easy to organize your research with our built-in tools.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

DeepDyve Freelancer

DeepDyve Pro

Price
FREE
$49/month

$360/year
Save searches from
Google Scholar,
PubMed
Create lists to
organize your research
Export lists, citations
Read DeepDyve articles
Abstract access only
Unlimited access to over
18 million full-text articles
Print
20 pages/month
PDF Discount
20% off