Stock market reactions to layoff announcements – analysis of the renewable energy sector

Kunert, Stephan; Schiereck, Dirk; Welkoborsky, Christopher

doi:10.1108/ijesm-02-2016-0004

Cited by 9 publications

(8 citation statements)

References 30 publications

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“…As a result, it has found that volatility of crude oil price and metal does not reflect directly on all Indian stock prices, but some industry has significant influence. Kunert et al (2017) examined the stock reactions after the 65 layoff announcements made by the companies between the periods 2005 and 2014 using the cumulative abnormal returns (CAR) methodology. The study found a negatively significant market reaction to the announcement on the event day.…”

Section: Studies Concluded Negative Relationship Between Crude Oil Prices and Stock Marketmentioning

confidence: 99%

A dynamic relationship between crude oil price and Indian equity market: an empirical study with special reference to Indian benchmark index Sensex

Yadav

Tandon

Tripathi

et al. 2020

BIJ

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PurposeThe purpose of the study is to investigate the long-run and short-run dynamic relationship between crude oil prices and the movement of Sensex for the period of 2000–2018.Design/methodology/approachThe study uses the augmented Dickey–Fuller test for the presence of unit root, Johansen cointegration test for estimating the cointegration among the variables. Further, in the case of no cointegration found, the study employed the vector autoregression (VAR) model to estimate the long-run relationship and the Granger causality/Wald test for short-run relationship. The study also conducted tests for the prerequisites of the model: serial correlation, heteroskedasticity and normality of data.FindingsThe study found that both the variables, crude oil prices and Sensex are integrated of order 1, that is, I (1), and there is no cointegration between them. Further, the results proliferated from the VAR model unfold the marked effect of previous month crude oil prices (lag 1) on the movement of Indian stock market represented by Sensex considered as the benchmark index. Furthermore, VAR–Granger causality/block exogeneity Wald tests results indicated that there is a causal relationship between the crude oil prices and Sensex under the VAR environment. The model does not have any serial correlation and heteroskedasticity indicating toward the unbiased and robust estimates.Research limitations/implicationsThe study is conducted till the year 2018, and data for the present period (post-2018) is excluded due to ongoing trade issues between the USA and oil-exporting countries such as Iran. The current COVID-19 outbreak has also put serious issues. Due to limited time and availability of standardized data, researchers have considered Sensex as equity index only, but for more generalized research outcome few other equity indexes could have been taken for study.Originality/valueThe study is completely original in nature and is an extensive study of the relationship between the crude oil price and Indian stock market with reference to causality between the variables.

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Section: Studies Concluded Negative Relationship Between Crude Oil Prices and Stock Marketmentioning

confidence: 99%

A dynamic relationship between crude oil price and Indian equity market: an empirical study with special reference to Indian benchmark index Sensex

Yadav

Tandon

Tripathi

et al. 2020

BIJ

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“…A host of studies have focused on the stock price response to employee layoff announcements (see Lee, 1997;Cascio, 1993;Elayan et al, 1998;Kunert et al, 2017). One common theme emerging from this literature is the importance of understanding how the market reacts to company employment announcements such as layoffs.…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Layoffs and stock market performance during the COVID-19 pandemic: evidence from the US

Floros

Psillaki

Karpouzis

2021

JES

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PurposeThe authors examine the short-term stock market reaction surrounding US layoffs during the coronavirus disease 2019 (COVID-19) period. The authors’ specific interest is on any changes that may be observed in US stock markets during the COVID-19 outbreak. This information will help us assess the extent to which policymakers adopted at time revenue and expenditures measures to minimize its negative impact.Design/methodology/approachThe authors study the linkage between layoffs announced by firms and stock markets in US for the COVID-19 period between March 2020 and October 2020. This period shows important economic figures; a huge number of job cuts announced by blue-chip companies listed in the New York Stock Exchange (NYSE) due to widespread economic shutdowns. The authors examine whether and to what extent stock markets in US have reacted to layoff announcements during the COVID-19 pandemic using an event-study methodology.FindingsThe study’s results show that US layoffs during the pandemic did not cause any abnormalities on the stock returns, either positive or negative. Based on the mean-adjusted volume, the authors find that layoffs increase the stocks' trading volume, especially on the event date and the day following the event. US stocks become more volatile on the days following the event. Interestingly, on the event date, the authors find that stocks get the highest abnormal volatility; however, the result is statistically insignificant.Practical implicationsThe authors suggest that layoffs announcements follow the business cycle quite closely in most industries. The study’s results have implications for investors, regulators and policymakers as they permit to examine the effectiveness of the measures adopted.Social implicationsThe study’s results show that policymakers reduced uncertainty implementing intensive measures quickly and should follow similar policy in the future pandemic and/or unexpected events.Originality/valueThis paper contributes to the literature in two directions: First, to the best of the authors’ knowledge this is the first study that provides empirical evidence and assesses the extent to which a major global shock such as the COVID-19 pandemic may have altered the reaction of US stock markets to layoff announcements. Second, this is the first study on this topic that examines volume and volatility abnormalities, while the authors check the robustness of the findings with different methods to calculate abnormal returns.

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“…Both of which operate in the energy industry, Energy Transfer and OKE have a significant interest in prospective energy pricing. Business valuation is challenging due to the significant fluctuation of petroleum and natural gas pricing [3]. This has been proven in current history, as world oil prices have undergone substantial changes and a high degree of instability.…”

Section: Introductionmentioning

confidence: 99%

Value Investment: A Case Study for Energy Companies

Li¹,

Long²,

Xia³

2022

Proceedings of the 2022 7th International Conference on Financial Innovation and Economic Development (ICFIED 2022)

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Energy sectors are regarded as one of the fastest-growing industries globally. The findings of this study aim to help the stockholders and investors to assess the best energy company in the market and encourage the investors to invest. The study also highlights key issues affecting energy companies and recommends the most appropriate strategy to change the situation. In this paper, we focus on energy industry and assess the stock valuation of energy companies. The study adopted both qualitative and quantitative methodology to assess stock valuation in the energy sector, i.e. EBIT and EBITDA. The results show that both Energy Transfer and OKE companies have witnessed significant increases or variations in the stock market; moreover, there is a positive relationship between stock changes and financial performance. The findings from this study will be helpful for investors and shareholders in assessing the best company in the energy industry to invest in.

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Stock market reactions to layoff announcements – analysis of the renewable energy sector

Cited by 9 publications

References 30 publications

A dynamic relationship between crude oil price and Indian equity market: an empirical study with special reference to Indian benchmark index Sensex

A dynamic relationship between crude oil price and Indian equity market: an empirical study with special reference to Indian benchmark index Sensex

Layoffs and stock market performance during the COVID-19 pandemic: evidence from the US

Value Investment: A Case Study for Energy Companies

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