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The Price Sensitivity Of Business Service Outsourcing Announcements By Uk Companies

Author

Listed:
  • AHMAD H. JUMA'H

    (Associate Professor of Accounting and Finance, Inter-American University, San Juan P. R., L M Rivera #54, Vega Alta, Puerto Rico 00692, USA)

  • DOUGLAS WOOD

    (Emeritus Professor, Manchester Business School, Booth Street West, Manchester, MIS 6PB, UK)

Abstract

This article investigates the market reaction to a sample of announcements of business service outsourcing arrangements made by UK quoted companies between 1991 and 1997. Event study methodology is applied to daily stock returns to measure the reaction, in the form of excess returns, immediately prior to and at the date of an outsourcing contract announcement. The conclusion is that initial announcements tend to enjoy positive and significant reaction and that the larger companies in the sample show a more positive reaction than smaller companies. Overall outsourcing announcements appear to be associated with excess returns but the absence of any recognized basis for disclosure prevents a complete analysis of such events.

Suggested Citation

  • Ahmad H. Juma'H & Douglas Wood, 2003. "The Price Sensitivity Of Business Service Outsourcing Announcements By Uk Companies," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 2(01), pages 161-180.
    • Handle: RePEc:wsi:ijitdm:v:02:y:2003:i:01:n:s0219622003000562
    DOI: 10.1142/S0219622003000562
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    Cited by:

    1. Dahlgrün, Philipp W. & Bausch, Andreas, 2019. "How Opportunistic Culture Affects Financial Performance in Outsourcing Relationships: A Meta-Analysis," Journal of International Management, Elsevier, vol. 25(1), pages 81-100.

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