Stock Market Reaction to Capital Investment Decisions: Evidence from Business Relocations

Posted: 11 May 2000

See all articles by Su Han Chan

Su Han Chan

City University of New York (CUNY) - Department of Real Estate

George W. Gau

University of Texas at Austin - Department of Finance

Ko Wang

City University of New York (CUNY) - Baruch College - Zicklin School of Business

Abstract

We investigate the stock market reaction to 447 announcements of business relocation decisions in the 1978-1990 period. We find that the stock market reaction to such decisions is tied to the motive for the relocation and the implied prospects for the firm, with the type of facility being relocated playing an insignificant role. Our finding reconciles several results in the literature concerning the stock market reaction to announcements of capital investment decisions.

JEL Classification: G31

Suggested Citation

Chan, Su Han and Gau, George W. and Wang, Ko, Stock Market Reaction to Capital Investment Decisions: Evidence from Business Relocations. Available at SSRN: https://ssrn.com/abstract=6291

Su Han Chan (Contact Author)

City University of New York (CUNY) - Department of Real Estate

One Bernard Baruch Way
New York, NY New York 10010
United States

George W. Gau

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States

Ko Wang

City University of New York (CUNY) - Baruch College - Zicklin School of Business ( email )

55 Lexington Ave., Box B13-260
New York, NY 10010
United States

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