The information content of corporate domicile relocation announcements: the case of Hong Kong

Siu-Yeung Chan and Wai-Ming Fong

Applied Financial Economics, 2000, vol. 10, issue 6, 635-644

Abstract: This paper examines the information content of domicile relocation announcements of Hong Kong listed companies. The results suggest that investors regard the disadvantages of domicile relocation as more significant than the advantages. There are statistically significant negative abnormal returns after the announcements. On the other hand, it was found that there was no statistically significant abnormal trading volume around the announcements, suggesting that the announcements are unexpected and investors interpret the relocation identically. The results contrast sharply with the statistically significant abnormal trading volume but insignificant abnormal returns around the announcements as documented in previous studies. It was found that those studies used unreliable data and inappropriate methods, which lead to misleading results.

Date: 2000
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DOI: 10.1080/096031000437980

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