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Does Reorganization Adjudication Convey Firm‐Specific Or Industry‐Wide Information? Evidence From Taiwan

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  • TSENG‐CHUNG TANG
  • LI‐CHIU CHI

Abstract

In this paper, we investigate whether reorganization adjudication only conveys information about the announcer or whether it also provides industry‐wide information for rivals. We find evidence of strong information content and information transfer arising from the announcement. Reorganization adjudication announcements are associated with positive share prices for announcers, but produce both positive contagion and negative competitive effects for industry rivals, with the latter dominating. We also develop a neuro‐fuzzy model and link it to the input feature selection method of genetic algorithms to examine which rivals are more likely to exhibit a contagion or competitive effect in their equity values.

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  • Tseng‐Chung Tang & Li‐Chiu Chi, 2009. "Does Reorganization Adjudication Convey Firm‐Specific Or Industry‐Wide Information? Evidence From Taiwan," Manchester School, University of Manchester, vol. 77(1), pages 82-95, January.
    • Handle: RePEc:bla:manchs:v:77:y:2009:i:1:p:82-95
    DOI: 10.1111/j.1467-9957.2008.02088.x
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    Cited by:

    1. Tseng-Chung Tang, 2010. "The information content of reorganization procedures: contagion or competitive effects?," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 9(2), pages 141-161, August.

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