The influence of the financial press on stockholder wealth : the case of corporate governance
By: JOHNSON, Jonathan L
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Contributor(s): ELLSTRAND, Alan E | DALTON, Dan R | DALTON, Catherine M.
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ArticlePublisher: UK : Wiley, May 2005Subject(s): Governança Corporativa | Conselho de administração | Financial pressStrategic Management Journal 26, 5, p. 461 - 471Abstract: This study examines the impact that the publication of ratings of boards of directors by the business press has on stockholder wealth. We report findings from an event study of price reactions to the publication of Business Week's 1996 and 1997 ratings of boards of directors of U.S. corporations. As hypothesized, favorable ratings resulted in significant positive abnormal returns after controlling for market effects and confounding events, with only novel information explaining statistical variance. Contrary to expectations, unfavorable ratings also resulted in positive abnormal returns.
This study examines the impact that the publication of ratings of boards of directors by the business press has on stockholder wealth. We report findings from an event study of price reactions to the publication of Business Week's 1996 and 1997 ratings of boards of directors of U.S. corporations. As hypothesized, favorable ratings resulted in significant positive abnormal returns after controlling for market effects and confounding events, with only novel information explaining statistical variance. Contrary to expectations, unfavorable ratings also resulted in positive abnormal returns.
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