Effect of investments on fundamentals and market reaction on pre-operational and operational Brazilian companies for the period 2006-2012
Autor(a) principal: | |
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Data de Publicação: | 2016 |
Outros Autores: | , |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Revista de Administração (São Paulo) |
Texto Completo: | http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0080-21072016000100056 |
Resumo: | ABSTRACT This paper provides evidence on the market reaction to corporate investment decisions whose shareholder value is largely attributed to growth options. The exploratory research raised pre-operational companies and their operational pairs on the same economy segments. It had the purpose of investigating the existence of statistical differentiation from financial indicators that reflect the installed assets and growth assets, and then study the market reaction to changes in fixed assets as a signaling element about investment decisions. The formation process of operational assets and shareholder value almost exclusively dependent on asset growth stands out in the pre-operational companies. As a result, differentiation tests confirmed that the pre-operational companies had their value especially derived on growth options. The market reaction was particularly bigger in pre-operational companies with abnormal negative stock returns, while the operational companies had positive returns, which may indicate that the quality of the investment is judged based on the financial disclosure. Additionally, operational companies' investors await the disclosure to adjust their prices. We conclude that the results are consistent with the empirical evidence and the participants in financial markets to long-term capital formation investments should give that special attention. |
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Effect of investments on fundamentals and market reaction on pre-operational and operational Brazilian companies for the period 2006-2012capital investmentevent studyinstalled assetsgrowth optionsABSTRACT This paper provides evidence on the market reaction to corporate investment decisions whose shareholder value is largely attributed to growth options. The exploratory research raised pre-operational companies and their operational pairs on the same economy segments. It had the purpose of investigating the existence of statistical differentiation from financial indicators that reflect the installed assets and growth assets, and then study the market reaction to changes in fixed assets as a signaling element about investment decisions. The formation process of operational assets and shareholder value almost exclusively dependent on asset growth stands out in the pre-operational companies. As a result, differentiation tests confirmed that the pre-operational companies had their value especially derived on growth options. The market reaction was particularly bigger in pre-operational companies with abnormal negative stock returns, while the operational companies had positive returns, which may indicate that the quality of the investment is judged based on the financial disclosure. Additionally, operational companies' investors await the disclosure to adjust their prices. We conclude that the results are consistent with the empirical evidence and the participants in financial markets to long-term capital formation investments should give that special attention.Departamento de Administração da Faculdade de Economia, Administração e Contabilidade da Universidade de São Paulo2016-03-01info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersiontext/htmlhttp://old.scielo.br/scielo.php?script=sci_arttext&pid=S0080-21072016000100056Revista de Administração (São Paulo) v.51 n.1 2016reponame:Revista de Administração (São Paulo)instname:Universidade de São Paulo (USP)instacron:USP10.5700/rausp1223info:eu-repo/semantics/openAccessPereira,Marco AntonioSecurato,José RobertoSousa,Almir Ferreira deeng2016-03-30T00:00:00Zoai:scielo:S0080-21072016000100056Revistahttp://rausp.usp.br/PUBhttps://old.scielo.br/oai/scielo-oai.phprausp@usp.br||reinhard@usp.br1984-61420080-2107opendoar:2016-03-30T00:00Revista de Administração (São Paulo) - Universidade de São Paulo (USP)false |
dc.title.none.fl_str_mv |
Effect of investments on fundamentals and market reaction on pre-operational and operational Brazilian companies for the period 2006-2012 |
title |
Effect of investments on fundamentals and market reaction on pre-operational and operational Brazilian companies for the period 2006-2012 |
spellingShingle |
Effect of investments on fundamentals and market reaction on pre-operational and operational Brazilian companies for the period 2006-2012 Pereira,Marco Antonio capital investment event study installed assets growth options |
title_short |
Effect of investments on fundamentals and market reaction on pre-operational and operational Brazilian companies for the period 2006-2012 |
title_full |
Effect of investments on fundamentals and market reaction on pre-operational and operational Brazilian companies for the period 2006-2012 |
title_fullStr |
Effect of investments on fundamentals and market reaction on pre-operational and operational Brazilian companies for the period 2006-2012 |
title_full_unstemmed |
Effect of investments on fundamentals and market reaction on pre-operational and operational Brazilian companies for the period 2006-2012 |
title_sort |
Effect of investments on fundamentals and market reaction on pre-operational and operational Brazilian companies for the period 2006-2012 |
author |
Pereira,Marco Antonio |
author_facet |
Pereira,Marco Antonio Securato,José Roberto Sousa,Almir Ferreira de |
author_role |
author |
author2 |
Securato,José Roberto Sousa,Almir Ferreira de |
author2_role |
author author |
dc.contributor.author.fl_str_mv |
Pereira,Marco Antonio Securato,José Roberto Sousa,Almir Ferreira de |
dc.subject.por.fl_str_mv |
capital investment event study installed assets growth options |
topic |
capital investment event study installed assets growth options |
description |
ABSTRACT This paper provides evidence on the market reaction to corporate investment decisions whose shareholder value is largely attributed to growth options. The exploratory research raised pre-operational companies and their operational pairs on the same economy segments. It had the purpose of investigating the existence of statistical differentiation from financial indicators that reflect the installed assets and growth assets, and then study the market reaction to changes in fixed assets as a signaling element about investment decisions. The formation process of operational assets and shareholder value almost exclusively dependent on asset growth stands out in the pre-operational companies. As a result, differentiation tests confirmed that the pre-operational companies had their value especially derived on growth options. The market reaction was particularly bigger in pre-operational companies with abnormal negative stock returns, while the operational companies had positive returns, which may indicate that the quality of the investment is judged based on the financial disclosure. Additionally, operational companies' investors await the disclosure to adjust their prices. We conclude that the results are consistent with the empirical evidence and the participants in financial markets to long-term capital formation investments should give that special attention. |
publishDate |
2016 |
dc.date.none.fl_str_mv |
2016-03-01 |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0080-21072016000100056 |
url |
http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0080-21072016000100056 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
10.5700/rausp1223 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
text/html |
dc.publisher.none.fl_str_mv |
Departamento de Administração da Faculdade de Economia, Administração e Contabilidade da Universidade de São Paulo |
publisher.none.fl_str_mv |
Departamento de Administração da Faculdade de Economia, Administração e Contabilidade da Universidade de São Paulo |
dc.source.none.fl_str_mv |
Revista de Administração (São Paulo) v.51 n.1 2016 reponame:Revista de Administração (São Paulo) instname:Universidade de São Paulo (USP) instacron:USP |
instname_str |
Universidade de São Paulo (USP) |
instacron_str |
USP |
institution |
USP |
reponame_str |
Revista de Administração (São Paulo) |
collection |
Revista de Administração (São Paulo) |
repository.name.fl_str_mv |
Revista de Administração (São Paulo) - Universidade de São Paulo (USP) |
repository.mail.fl_str_mv |
rausp@usp.br||reinhard@usp.br |
_version_ |
1748936717033799680 |