Event Study on the Impact of Earnings Announcement Upon the Market Value of SIF

Author:Dragoș BÎLTEANU, Marianna BOTIKA, Univ. Prof. Ion STANCU, Ph. D.

JEL:G12, L25, M41

DOI:

Keywords:financial reporting, event study, market model, "build-up" model, abnormal returns

Abstract:
Financial reporting enables companies to obtain financial information about their performance. The financial report has (or should have) a significant impact on the market, increasing the earnings of those who can correctly predict the direction and magnitude of results.\r\nResearch conducted by the authors includes two parts, namely the theoretical foundations of the study event (subject to this article) and the impact of financial reporting empirical research on the value of the SIFs (in a future article). Literature synthesis of this article covers research on indicators (earnings, cash flow, market liquidity etc.) that may be impacted by the period of financial statements publication and the consequences arising from the announcement of financial results.\r\nResearch methodology presents the stages of the event study, fixation window (period) of the event study, highlighting the assumptions and return highlighting patterns changed following the publication of financial results. Event study method emphasizes changes in actual returns during the event analyzed to estimate returns as normal, according to the two models (market or build-up).\r\n

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