The European Union (EU) is currently being exposed to strong integration dynamics. However, the full implications of such dynamics for the location of foreign direct investment (FDI) for both the European Union and the bordering countries are not understood. We construct a panel of more than 3500 European multinationals that have invested in Central and Eastern Europe (CEE) and the Mediterranean (MED) over the 1990-1997 period in 48 NACE 3 industries. After controlling for industry and time-specific effects, it is found that Central and Eastern Europe displays a greater potential in the attraction of FDI flows when compared to the Mediterranean region.
This paper examines the abnormal stock returns around the publication of 1167 reports issued by 26 brokerage firms on 37 small caps admitted to listing on the Italian Stock Market from 2003 to 2011. The focus is on small caps going public because for such firms information asymmetries may be severe and, therefore, analyst reports should be particularly valuable to the market. Several hypotheses are tested. First of all, the market impact is computed for the whole sample and for each recommendation category (buy, hold and sell). The exercise is repeated by controlling for the presence of contemporaneous news; by taking into account only the initiations of coverage; by selecting only the changes in recommendations. The results obtained through a standard event study methodology show that analyst reports on small caps are informative for the market, although the price impact differs across the samples considered. For the whole sample of reports, the cumulative abnormal returns estimated over a 3‐day event window around the publication date are statistically significant for buy and hold recommendations only (+0.98 and −0.83 per cent, respectively); however, after selecting out contaminating events only buys are significant (+1.13 per cent). Also the buy recommendations included in the initiation of coverage sample turn out to convey information to the market (+1.50 per cent); the highest price impact, however, is estimated for the upgrades included in the revisions of recommendation sample (+2.19 per cent). The second result of the paper is that information leakage is not widespread, given that abnormal returns are almost never significant before the report date. Therefore on average, the timing of the market reaction to financial research dissemination does not signal tipping or selective disclosure.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.