Corporate Crime Announcement and Share Prices of Deposit Money Banks in Nigeria

Yusuf Musa Muhammad and Kabiru Umar

International Journal of Management Sciences, 2016, vol. 7, issue 6, 296-301

Abstract: This study analyses the impact of Crime announcement in Central Bank of Nigeria on the share prices of Deposit Money Banks (DMBs) in Nigeria. It tries to determine whether or not corporate crime announcement for a sample of 20 DMBS resulted in an abnormal return around the announcement day in the Nigerian Stock Exchange. Using event study, the abnormal returns for the event window days (-5, +5) are calculated over estimation parameter (-120, -6 days), employing the Market Model. For test of statistical significance, t-statistics was employed. The findings of the study indicate that, there is positive, but insignificant abnormal return on share prices of DMBs before, on, and after the day of announcement of crime in Central Bank at 5% level of significance. Thus, the study concludes that, there is no significant abnormal return before, on the date and after crime announcement in Central Bank of Nigeria for share prices of DMBs in Nigeria. Therefore, the study recommends that the Apex Bank and other regulatory bodies should be more proactive in devising mechanisms towards eliminating or deterring criminal activities among employees.

Keywords: Corporate Crime; Central Bank; Share prices; and DMBs (search for similar items in EconPapers)
Date: 2016
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