Information Efficiency and the European Transparency Directive: Does the Disclosure of Changes in Voting Rights Matter? – Evidence from Germany
CARF Luzern 2017 (Conference book)
Posted: 14 Sep 2017
Date Written: November 28, 2014
This study analyses the impact on the capital market of disclosures of changes in voting rights as determined by the European Transparency Directive I and implemented through Sections 21 to 30 German Securities Trading Law (WpHG). An event study is used to analyse the disclosures of the top 160 German corporations for the period 2006 to 2012. Significant capital market reactions can be demonstrated, especially for disposal disclosures. The analysis reveals that the crossing of the 5% threshold in either direction results in significant reactions within the equity market. In contrast, other thresholds such as the 3% or the 10% threshold do not have the same impact. This study provides a first empirical analysis in this field and augments extant judicial literature on the disclosure of changes in voting rights. Additionally, it provides the policy makers with first evidence of the information relevance of its implemented standards.
Keywords: shareholding, disclosure of change in voting rights, thresholds, German Securities Trading Law (WpHG), information efficiency, event study
JEL Classification: K20, K22, G14
Suggested Citation: Suggested Citation