The Effect of Shock Events on Shareholders Value

M. Ferretti and E. Ziccardi (Italy)


Crisis Management, Shock Event, Event Study


This paper examines the impact of shock events on interested companies' common stock prices. A shock event is an unpredictable situation, which occurs suddenly and quickly and causes serious damages to the firm and its stakeholders. The `event study' methodology has been used. The results of the study show that shock events have a significant negative effect on the event day; it also emerges a smaller but significant effect on the five following days. Drivers of value destruction are also investigated.

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