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Student
Title
Supervisor
Faculty
Educational Programme
Final Grade
Year of Graduation
Ekaterina Polishhuk
Luxury companies reaction to corporate news using event study methodology
Bachelor’s programme
2014
The luxury goods market is one of the fast growing markets. Luxury companies’ stock prices exceed the stock prices of the biggest corporations in the world. Corporate new influence the stock prices. The research issue in this paper can be formulated as subsequent - how corporate news influence stock prices of luxury companies. The event study analysis is used for the estimation of this effect. It enables to determine the significance of prices reaction to the events.The purpose of this paper is the determination of corporate news impact on the luxury companies’ stock prices by means of event study analysis.The first chapter gives the observation of main trends and the major players on the luxury market. The second and third chapters provide the analysis of event study papers with describing step by step the event study methodology. The last chapter summarizes the conclusions and gives it economic interpretation according to the specific characteristics of luxury industry.15 largest by market capitalization Apparel& Accessories luxury goods companies are used for the empirical base. The corporate events base consist of 261 announcements divided by groups: strategy of development (67 news); financial results (54 news); collaborations and partnerships (50 news); management (48 news); mergers & acquisitions (42 news). On the next step all news are divided by smaller subcategories. The period of study is 01.01.2006 - 31.12.2013.To conclude, such subcategories as growth prospective, positive financial results, implementation of new products, opening of new boutiques, new management team, structure changes in management, expansion in different regions, mergers & acquisitions are good signals and they lead to the positive cumulative abnormal returns (CAR). On the other hand, corporate events such as negative financial results, strategy in retail, digital strategy, the management team leave, collaborations and partnership are considered as bad signals and they lead to the negative cumulative abnormal returns (CAR).

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