What drives the market value of firms in the Defense industry?

Gunther Capelle-Blancard and Nicolas Couderc ()
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Nicolas Couderc: Centre d'Economie de la Sorbonne

Cahiers de la Maison des Sciences Economiques from Université Panthéon-Sorbonne (Paris 1)

Abstract: This paper investigates the relative importance of different types of news in driving significant stock price changes of firms in the defense industry. We implement a systematic event study with a sample of the 58 largest publicly listed companies in the defense industry, over the time period 1995-2005. We first identify, for each firm, the statistically significant abnormal returns over the time period, and then we look for information releases likely to cause such stock price movements. We find that stock price movements in the defense industry are, in many ways, influenced by the same events as in other industries (key role of formal earnings announcements or analysts' recommendations) but this industry also has some specific features, in particular the influence of geopolitical events and the relevance and frequency of bids and contracts on stock prices

Keywords: Event study; financial markets; defense industry; information releases; GARCH models (search for similar items in EconPapers)
JEL-codes: G14 G34 L64 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2005-12, Revised 2006-04
New Economics Papers: this item is included in nep-cfn, nep-fin, nep-fmk and nep-rmg
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Published in Review of Financial Economics, Elsevier, 2008, 17 (1), pp.14-32

Downloads: (external link)
https://hal.archives-ouvertes.fr/halshs-00115655 (application/pdf)
https://doi.org/10.1016/j.rfe.2007.02.001

Related works:
Journal Article: What drives the market value of firms in the defense industry (2008)
Journal Article: What drives the market value of firms in the defense industry? (2008)
Working Paper: What drives the market value of firms in the defense industry? (2008)
Working Paper: What drives the market value of firms in the defense industry? (2008)
Working Paper: What drives the market value of firms in the defense industry? (2006)
Working Paper: What drives the market value of firms in the defense industry? (2006)
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