Is the Market Swayed by Press Releases on Corporate Governance? Event Study on the Eurostoxx Banks

Corporate Ownership & Control / Volume 15, Issue 3, Spring 2018

9 Pages Posted: 20 Mar 2019

See all articles by Marina Brogi

Marina Brogi

University of Rome I - Dipartimento Banche Assicurazioni Mercati

Valentina Lagasio

Sapienza University

Date Written: 2018

Abstract

Are press releases on Corporate Governance price sensitive? What is the impact of Corporate Governance information on stock prices of banks? This paper addresses these questions by applying an event study methodology on 70 press releases published by the Euro area banks listed on the Eurostoxx banks Index, from 2007 to 2016. Systemic shocks are explored as well idiosyncratic ones. Our results show that investment decisions are significantly but negatively influenced by the disclosure of a press release on corporate governance as if this kind of news leads investors to perceive the banks' prospects negatively. The best of our knowledge this is the first paper that investigates European banks press releases on corporate governance. Findings are relevant for banks' management and their disclosure policy. Nonetheless, further research is needed to investigate differences and similarities between an area of governance disclosure and another.

Keywords: Banks, Corporate Governance, Event Study, Press Releases

JEL Classification: E52, E58, G14, G21

Suggested Citation

Brogi, Marina and Lagasio, Valentina, Is the Market Swayed by Press Releases on Corporate Governance? Event Study on the Eurostoxx Banks (2018). Corporate Ownership & Control / Volume 15, Issue 3, Spring 2018, Available at SSRN: https://ssrn.com/abstract=3343650

Marina Brogi

University of Rome I - Dipartimento Banche Assicurazioni Mercati ( email )

Rome
Italy

Valentina Lagasio (Contact Author)

Sapienza University ( email )

Via del Castro Laurenziano, 9
Rome, 00185
Italy

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