Year of Graduation
Event-study of Company Stock: Evidence from PPP News
Current paper is aimed to identify the influence of news on company's stocks in case of participation in public-private partnership projects. The analysis is conducted on the unique sample of financial close announcement of PPP projects, implemented in developing countries during 2000-2015. The study examines the influence of announced information about financial close of PPP project on company's stock abnormal return using event study approach. As a result of regression analysis key determinants of stock abnormal returns after announcement of PPP project financial close are identified. The results of event study analysis demonstrate negative and significant market reaction. The regression analysis of determinants identifies positive market reaction in case of industry relatedness of company and project and in case of high interest coverage ratio. Negative market reaction, in turn, can be caused by high proportion of project investment to company's total assets and high level of operational efficiency. Obtained results contribute to existing base of PPP research and can provide the base for future investigations.