The Preholiday Corporate Announcement Effect

59 Pages Posted: 9 Nov 2014 Last revised: 21 Nov 2019

See all articles by Don M. Autore

Don M. Autore

Florida State University - College of Business

Danling Jiang

College of Business, Stony Brook University

Date Written: April 1, 2019

Abstract

We find that investors react more favorably to announcements of share repurchases, SEOs, earnings, dividend changes, and acquisitions if the announcement is made immediately prior to or on holidays. Preholiday corporate announcements are associated with more positive reactions for favorable events and less negative reactions for unfavorable events. This effect is robust to controls for market conditions and a selection bias, is accompanied by subsequent reversals, and is present in several international markets. Our findings suggest that predictable individual mood changes can cause biases in market reactions to firm-specific news.

Keywords: Corporate announcements, market reaction, preholiday effect, mood, market efficiency

JEL Classification: G14, G30

Suggested Citation

Autore, Don M. and Jiang, Danling, The Preholiday Corporate Announcement Effect (April 1, 2019). Journal of Financial Markets, 2019, 45: 61-82, Available at SSRN: https://ssrn.com/abstract=2520489 or http://dx.doi.org/10.2139/ssrn.2520489

Don M. Autore

Florida State University - College of Business ( email )

821 ACADEMIC WAY, Room 314 RBA
P.O. Box 3061110
Tallahassee, FL 32306-1110
United States
850-644-7857 (Phone)

Danling Jiang (Contact Author)

College of Business, Stony Brook University ( email )

306 Harriman Hall
Stony Brook, NY 11794
United States

HOME PAGE: http://sites.google.com/site/danlingjiang

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