The influence of the financial press on stockholder wealth: the case of corporate governance
Version of Record online: 11 MAR 2005
Copyright © 2005 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 26, Issue 5, pages 461–471, May 2005
How to Cite
Johnson, J. L., Ellstrand, A. E., Dalton, D. R. and Dalton, C. M. (2005), The influence of the financial press on stockholder wealth: the case of corporate governance. Strat. Mgmt. J., 26: 461–471. doi: 10.1002/smj.457
- Issue online: 23 MAR 2005
- Version of Record online: 11 MAR 2005
- Manuscript Revised: 30 OCT 2004
- Manuscript Received: 28 OCT 2002
- corporate governance;
- boards of directors;
- financial press
This study examines the impact that the publication of ratings of boards of directors by the business press has on stockholder wealth. We report findings from an event study of price reactions to the publication of Business Week's 1996 and 1997 ratings of boards of directors of U.S. corporations. As hypothesized, favorable ratings resulted in significant positive abnormal returns after controlling for market effects and confounding events, with only novel information explaining statistical variance. Contrary to expectations, unfavorable ratings also resulted in positive abnormal returns. Copyright © 2005 John Wiley & Sons, Ltd.