Since 1990, many U.S. firms have registered under the provisions of the ISO 9000 standard. Meeting the qualifications of this registration requires considerable time and money. To this point, the justification has been put in terms of management commitment to quality, cost reduction, or opening new markets, particularly international markets. We contribute by examining the reaction of the firms' stock price to the announcement of ISO 9000 registration. We find that for the smallest firms, ISO 9000 registration is regarded as positive information by investors. We also find that the market reaction to ISO 9000 registration is sensitive to the signing of the Maastricht Treaty in 1992.
We examine whether investor reactions are sensitive to the recent direction or volatility of underlying market movements. We find that dividend change announcements elicit a greater change in stock price when the nature of the news (good or bad) goes against the grain of the recent market direction during volatile times. For example, announcements to lower dividends elicit a significantly greater decrease in stock price when market returns have been up and more volatile. Similarly, announcements to raise dividends tends to elicit a greater increase in stock price when market returns have been normal or down and more volatile, although this latter tendency lacks statistical significance. We suggest an explanation for these results that combines the implications of a dynamic rational expectations equilibrium model with behavioral considerations that link the responsiveness of investors to market direction and volatility. 2005 The Southern Finance Association and the Southwestern Finance Association.
Recent work offers mixed results regarding the nature of intraday volatility patterns in futures markets and, specifically, the existence of spikes in futures return volatility during the middle of the U.S. trading day (Crain & Lee, 1995;Kawaller, Koch, & Peterson, 1994). This note analyzes time and sales data on two markets-Eurodollar futures and deutsche mark futures-to investigate the existence of such spikes, and to examine the nature of changes in intraday volatility patterns over time.
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.