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

See all articles by Karsten Eisenschmidt

Karsten Eisenschmidt

Fachhochschule Kiel: University of Applied Sciences

Jan-Hendrik Meier

Fachhochschule Kiel

Date Written: November 28, 2014

Abstract

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

Eisenschmidt, Karsten and Meier, Jan-Hendrik, Information Efficiency and the European Transparency Directive: Does the Disclosure of Changes in Voting Rights Matter? – Evidence from Germany (November 28, 2014). CARF Luzern 2017 (Conference book), Available at SSRN: https://ssrn.com/abstract=3035885

Karsten Eisenschmidt (Contact Author)

Fachhochschule Kiel: University of Applied Sciences ( email )

Sokratesplatz 2
Kiel, 24149
Germany

Jan-Hendrik Meier

Fachhochschule Kiel ( email )

Sokratesplatz 1
Kiel, 24149
Germany

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