Ownership Concentration and the Information Content of Operational Loss Announcements

32 Pages Posted: 29 Jun 2018 Last revised: 30 Aug 2018

See all articles by Anna Chernobai

Anna Chernobai

Syracuse University - M. J. Whitman School of Management

Suren Pakhchanyan

University of Oldenburg

Jörg Prokop

University of Oldenburg - Finance and Banking; ZenTra - Center for Transnational Studies

Date Written: March 23, 2017

Abstract

We investigate information transfer effects of operational loss announcements to the announcing firm’s blockholder. Based on an event study, we find that the firm-blockholder link tends to be weak for U.S. financial sector blockholders, with significant negative spillover effects occurring mainly for larger blockholders, for blockholders incorporated as depository institutions with a higher exposure to the respective loss announcing firm, and for higher operational loss amounts. Our findings contribute to the understanding of the equity pricing process in the presence of operational risk, and they show that operational risk is not entirely idiosyncratic but may bear a considerable contagious element.

Keywords: Blockholder, Information Transfer, Operational Risk, Financial Industry

JEL Classification: G14, G20, G32

Suggested Citation

Chernobai, Anna and Pakhchanyan, Suren and Prokop, Jörg, Ownership Concentration and the Information Content of Operational Loss Announcements (March 23, 2017). Available at SSRN: https://ssrn.com/abstract=3195905 or http://dx.doi.org/10.2139/ssrn.3195905

Anna Chernobai

Syracuse University - M. J. Whitman School of Management ( email )

721 University Ave
Syracuse, NY 13244-2450
United States
(315) 443 3357 (Phone)

HOME PAGE: http://https://sites.google.com/a/g.syr.edu/anna-chernobai/

Suren Pakhchanyan (Contact Author)

University of Oldenburg ( email )

Ammerländer Heerstraße 114-118
Oldenburg, 26111
Germany

Jörg Prokop

University of Oldenburg - Finance and Banking ( email )

Germany

ZenTra - Center for Transnational Studies ( email )

Ammerländer Heerstraße 138
Oldenburg, 26131
Germany

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