International oligopoly and stock market linkages : the case of global airlines

Stephen X. H. GONG; Michael Arthur FIRTH; Kevin CULLINANE

doi:10.1016/j.tre.2007.05.008

International oligopoly and stock market linkages : the case of global airlines

Stephen X. H. GONG, Michael Arthur FIRTH, Kevin CULLINANE

Department of Finance and Insurance

Research output: Journal Publications › Journal Article (refereed) › peer-review

10 Citations (Scopus)

Abstract

This paper investigates the effect of oligopolistic rivalry on spillovers in financial reporting. Using an event study methodology and focusing on global airlines, we find that firms experience discernable abnormal stock price reactions at the announcement of unexpected earnings by rival airlines. The extent of the price reactions is related to the extent of rivalry between the announcing and non-announcing firms, among other factors. Our empirical evidence, which is inconsistent with the contestable markets hypothesis, confirms an association between the stock market performance of players in a global industry and the extent of inter-firm rivalry in the product market.

Original language	English
Pages (from-to)	621-636
Number of pages	16
Journal	Transportation Research Part E: Logistics and Transportation Review
Volume	44
Issue number	4
DOIs	https://doi.org/10.1016/j.tre.2007.05.008
Publication status	Published - 1 Jul 2008

Bibliographical note

Paper presented at the 10th Annual Conference of the Air-Transport-Research-Society, May, 2006, Nagoya, Japan.

Keywords

Information transfer; Airlines; Earnings; Oligopoly; Stock market performance; Event study methodology

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10.1016/j.tre.2007.05.008

Cite this

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title = "International oligopoly and stock market linkages : the case of global airlines",

abstract = "This paper investigates the effect of oligopolistic rivalry on spillovers in financial reporting. Using an event study methodology and focusing on global airlines, we find that firms experience discernable abnormal stock price reactions at the announcement of unexpected earnings by rival airlines. The extent of the price reactions is related to the extent of rivalry between the announcing and non-announcing firms, among other factors. Our empirical evidence, which is inconsistent with the contestable markets hypothesis, confirms an association between the stock market performance of players in a global industry and the extent of inter-firm rivalry in the product market.",

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author = "GONG, {Stephen X. H.} and FIRTH, {Michael Arthur} and Kevin CULLINANE",

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AU - GONG, Stephen X. H.

AU - FIRTH, Michael Arthur

AU - CULLINANE, Kevin

N1 - Paper presented at the 10th Annual Conference of the Air-Transport-Research-Society, May, 2006, Nagoya, Japan.

PY - 2008/7/1

Y1 - 2008/7/1

N2 - This paper investigates the effect of oligopolistic rivalry on spillovers in financial reporting. Using an event study methodology and focusing on global airlines, we find that firms experience discernable abnormal stock price reactions at the announcement of unexpected earnings by rival airlines. The extent of the price reactions is related to the extent of rivalry between the announcing and non-announcing firms, among other factors. Our empirical evidence, which is inconsistent with the contestable markets hypothesis, confirms an association between the stock market performance of players in a global industry and the extent of inter-firm rivalry in the product market.

AB - This paper investigates the effect of oligopolistic rivalry on spillovers in financial reporting. Using an event study methodology and focusing on global airlines, we find that firms experience discernable abnormal stock price reactions at the announcement of unexpected earnings by rival airlines. The extent of the price reactions is related to the extent of rivalry between the announcing and non-announcing firms, among other factors. Our empirical evidence, which is inconsistent with the contestable markets hypothesis, confirms an association between the stock market performance of players in a global industry and the extent of inter-firm rivalry in the product market.

KW - Information transfer; Airlines; Earnings; Oligopoly; Stock market performance; Event study methodology

UR - http://commons.ln.edu.hk/sw_master/1639

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DO - 10.1016/j.tre.2007.05.008

M3 - Journal Article (refereed)

SN - 1366-5545

VL - 44

SP - 621

EP - 636

JO - Transportation Research Part E: Logistics and Transportation Review

JF - Transportation Research Part E: Logistics and Transportation Review

IS - 4

ER -

International oligopoly and stock market linkages : the case of global airlines

Abstract

Bibliographical note

Keywords

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