Reactions of equity markets to recent financial reforms
Nonna Sorokina and
Journal of Economics and Business, 2016, vol. 87, issue C, 50-69
We conduct event studies of broad equity market reaction to the events surrounding introduction and enactment of recent financial reform initiatives. In response to the introduction of the Dodd-Frank Act, financial firms and firms from a few other industries experience a statistically significant decrease in systematic risk, while a substantial number of industries, representing a broad cross-section of the economy, experiences a statistically significant increase in systematic risk. The systematic risk in some industries does not change. The increase in risk is concentrated in industries in which firms are dependent on external capital. The initial market reaction to Dodd-Frank indicates that it may lower the risk in financial firms, but the risk for many non-financial firms simultaneously increases.
Keywords: Dodd-Frank Act; Systematic risk; Regulation; Event study; Dependence on external capital (search for similar items in EconPapers)
JEL-codes: G14 G21 G28 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:jebusi:v:87:y:2016:i:c:p:50-69
Access Statistics for this article
Journal of Economics and Business is currently edited by Kenneth J. Kopecky
More articles in Journal of Economics and Business from Elsevier
Bibliographic data for series maintained by Haili He ().