The efficient market hypothesis and corporate event waves: Part II

Hu, M 2014, 'The efficient market hypothesis and corporate event waves: Part II', Corporate Finance Review, vol. 18, no. 6, pp. 20-26.


Document type: Journal Article
Collection: Journal Articles

Title The efficient market hypothesis and corporate event waves: Part II
Author(s) Hu, M
Year 2014
Journal name Corporate Finance Review
Volume number 18
Issue number 6
Start page 20
End page 26
Total pages 7
Publisher W G & L Financial Reporting & Management Research
Abstract This article is the second of a two-part series on the efficient market hypothesis corporate event waves. The ideas of market efficiency, or rational theory, and the behavioral hypothesis have been extensively used to explain the modern phenomena of corporate event waves. Some studies investigate the patterns of corporate events from a behavioral finance perspective and suggest that corporate announcement waves are driven by investor sentiment. Baker and Wurgler examine equity market timing as an aspect of real corporate financial policy. Sentiment can also explain IPO waves. Post-announcement returns and IPO volume are positively correlated to firms' capital demands and the level of investor optimism. Helwge and Liang examine the IPO cycles from hot to cold markets from 1975 to 2000. Corporate e vent wave scan also be explained by the neoclassical efficiency hypothesis, proposing that business cycle fluctuations and economic conditions drive firms' decisions on financing transactions.
Subject Banking, Finance and Investment not elsewhere classified
Copyright notice © 2014
ISSN 1089-327X
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