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Market reactions to financial distress announcements: do political connections matter?


Ahmad, Abd Halim @ Hamilton and Abdullah, Nur Adiana Hiau and Taufil Mohd, Kamarun Nisham (2018) Market reactions to financial distress announcements: do political connections matter? Cogent Economics & Finance, 6 (1). pp. 1-8. ISSN 2332-2039

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Abstract

We examined market reactions to the financial distress announcements of listed firms in Malaysia. We investigated whether the market differentiates between the politically connected and non-politically connected vis-a-vis the outcomes at the time of the announcements. There is evidence of differing reactions to announcements by politically connected and non-connected firms. Investors react more negatively to the non-politically connected firms as compared to the politically connected ones.In addition, in the event of emergence from financial distress, the losses of politically connected firms were lower than for the non-politically connected firms.

Item Type: Article
Uncontrolled Keywords: financial distress, event study, political connections
Subjects: H Social Sciences > HC Economic History and Conditions
Divisions: School of Economics, Finance & Banking
Depositing User: Mrs. Norazmilah Yaakub
Date Deposited: 24 Feb 2019 00:03
Last Modified: 24 Feb 2019 00:03
URI: http://repo.uum.edu.my/id/eprint/25615

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