Stock price reaction to an arrangement approval in restructuring proceedings – the case of Poland

Błażej Prusak and Potrykus Marcin
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Potrykus Marcin: Faculty of Management and Economics, Gdańsk University of Technology, Gdańsk, Poland.

International Journal of Management and Economics, 2022, vol. 58, issue 3, 279-298

Abstract: The study aims to empirically analyze the reaction of stock prices to the information about the conclusion and acceptance of a debtor–creditor arrangement under restructuring proceedings of companies listed on the stock exchange in Poland. The following main research hypothesis was verified: public disclosure of information about an arrangement conclusion and acceptance in restructuring proceedings results in above-average rates of return due to investments in the stocks of these entities in the short term. Three events were assessed: the public disclosure of information about the conclusion of a debtor–creditor arrangement (Event 1), its approval by a court (Event 2), and the decision becoming final (Event 3). The research method applied was the event study. Event 1 and Event 3 leads to an above-average and statistically significant increase in stock prices on the day of the event. In contrast, no statistically significant above-average rates of return accompanied Event 2.

Keywords: event analysis; market efficiency; price reaction; restructuring proceedings (search for similar items in EconPapers)
JEL-codes: G11 G14 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:ijomae:v:58:y:2022:i:3:p:279-298:n:8

DOI: 10.2478/ijme-2022-0014

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