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Does the fashion of a management strategy affect the stock price? An event study of the fashion of downsizing

Johansson, Pontus; Ekstrand, Mattias and Treschow, Herman (2009)
Department of Business Administration
Abstract
The purpose with this thesis is to examine whether the popularity of downsizing as a management strategy has an effect on the stock market's reactions when a company announces downsizing. This thesis has employed a quantitative method. An event study has been used and we have calculated the normal and abnormal return using the market model. Data has been collected from Datastream in forms of stock prices and Affärsdata has been used to find the announcements about downsizing. The event window has been (-2, +2) days considering previous research. According to the statistical tests there are no differences between the two CAARs, which means that the stock market´s reaction to an announcement of downsizing does not differ when downsizing was... (More)
The purpose with this thesis is to examine whether the popularity of downsizing as a management strategy has an effect on the stock market's reactions when a company announces downsizing. This thesis has employed a quantitative method. An event study has been used and we have calculated the normal and abnormal return using the market model. Data has been collected from Datastream in forms of stock prices and Affärsdata has been used to find the announcements about downsizing. The event window has been (-2, +2) days considering previous research. According to the statistical tests there are no differences between the two CAARs, which means that the stock market´s reaction to an announcement of downsizing does not differ when downsizing was in fashion and when it was not. (Less)
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author
Johansson, Pontus; Ekstrand, Mattias and Treschow, Herman
supervisor
organization
year
type
H1 - Master's Degree (One Year)
subject
keywords
Downsizing, Management Strategy, Abnormal Return, CAR, Event study, Market model, Efficient market hypothesis, Survivor syndrome, Signaling hypothesis, Management of enterprises, Företagsledning, management
language
Swedish
id
1437798
date added to LUP
2009-06-03 00:00:00
date last changed
2012-04-02 17:24:12
@misc{1437798,
  abstract     = {The purpose with this thesis is to examine whether the popularity of downsizing as a management strategy has an effect on the stock market's reactions when a company announces downsizing. This thesis has employed a quantitative method. An event study has been used and we have calculated the normal and abnormal return using the market model. Data has been collected from Datastream in forms of stock prices and Affärsdata has been used to find the announcements about downsizing. The event window has been (-2, +2) days considering previous research. According to the statistical tests there are no differences between the two CAARs, which means that the stock market´s reaction to an announcement of downsizing does not differ when downsizing was in fashion and when it was not.},
  author       = {Johansson, Pontus and Ekstrand, Mattias and Treschow, Herman},
  keyword      = {Downsizing,Management Strategy,Abnormal Return,CAR,Event study,Market model,Efficient market hypothesis,Survivor syndrome,Signaling hypothesis,Management of enterprises,Företagsledning, management},
  language     = {swe},
  note         = {Student Paper},
  title        = {Does the fashion of a management strategy affect the stock price? An event study of the fashion of downsizing},
  year         = {2009},
}