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Does the Medium Matter? The Relations among Bankruptcy Petition Filings, Broadtape Disclosure, and the Timing of Price Reactions

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Listed:
  • Mark C. Dawkins

    (Terry College of Business, University of Georgia)

  • Linda Smith Bamber

    (Terry College of Business, University of Georgia)

Abstract

Drawing on a comprehensive sample of 330 bankruptcy petition filings from 1980 to 1993, we find that most of the market reaction does not occur on the bankruptcy petition filing date when the information becomes publicly available. Rather, most of the reaction occurs when news of the bankruptcy filing is more widely disseminated via the Broadtape. This "Broadtape announcement effect" persists after controlling for firm size, exchange listing, and predisclosure information. These are primarily timing differences since abnormal returns cumulated over an 11-day window centered on the filing date do not differ significantly across Broadtape disclosure date classifications. Copyright The American Finance Association 1998.

Suggested Citation

  • Mark C. Dawkins & Linda Smith Bamber, 1998. "Does the Medium Matter? The Relations among Bankruptcy Petition Filings, Broadtape Disclosure, and the Timing of Price Reactions," Journal of Finance, American Finance Association, vol. 53(3), pages 1149-1163, June.
    • Handle: RePEc:bla:jfinan:v:53:y:1998:i:3:p:1149-1163
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    Cited by:

    1. Abd Halim Ahmad & Nur Adiana Hiau Abdullah & Kamarun Nisham Taufil Mohd, 2016. "Market reactions to financial distress announcements: Does the market react differently to different outcomes?," Economics Bulletin, AccessEcon, vol. 36(2), pages 601-608.
    2. Ena Rose-Green & Linda Lovata, 2013. "The Relationship between Firms’ Characteristics in the Periods Prior to Bankruptcy Filing and Bankruptcy Outcome," Accounting and Finance Research, Sciedu Press, vol. 2(1), pages 1-97, February.
    3. Sheng, Jie & Lan, Hao, 2019. "Business failure and mass media: An analysis of media exposure in the context of delisting event," Journal of Business Research, Elsevier, vol. 97(C), pages 316-323.
    4. Juniarti, 2022. "Market Reaction to Capital Expenditure: Evidence from Company in Bankruptcy Risk ," GATR Journals afr220, Global Academy of Training and Research (GATR) Enterprise.

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