International oligopoly and stock market linkages: The case of global airlines

Stephen X.H. Gong; Michael Firth; Kevin Cullinane

doi:10.1016/j.tre.2007.05.008

International oligopoly and stock market linkages: The case of global airlines

Stephen X.H. Gong, Michael Firth, Kevin Cullinane^*

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

10 Citations (Scopus)

Abstract

This paper investigates the effect of oligopolistic rivalry on spillovers in financial reporting. Using an event study methodology and focusing on global airlines, we find that firms experience discernable abnormal stock price reactions at the announcement of unexpected earnings by rival airlines. The extent of the price reactions is related to the extent of rivalry between the announcing and non-announcing firms, among other factors. Our empirical evidence, which is inconsistent with the contestable markets hypothesis, confirms an association between the stock market performance of players in a global industry and the extent of inter-firm rivalry in the product market.

Original language	English
Pages (from-to)	621-636
Number of pages	16
Journal	Transportation Research Part E: Logistics and Transportation Review
Volume	44
Issue number	4
DOIs	https://doi.org/10.1016/j.tre.2007.05.008
Publication status	Published - Jul 2008
Externally published	Yes

Keywords

Airlines
Earnings
Event study methodology
Information transfer
Oligopoly
Stock market performance

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10.1016/j.tre.2007.05.008

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title = "International oligopoly and stock market linkages: The case of global airlines",

abstract = "This paper investigates the effect of oligopolistic rivalry on spillovers in financial reporting. Using an event study methodology and focusing on global airlines, we find that firms experience discernable abnormal stock price reactions at the announcement of unexpected earnings by rival airlines. The extent of the price reactions is related to the extent of rivalry between the announcing and non-announcing firms, among other factors. Our empirical evidence, which is inconsistent with the contestable markets hypothesis, confirms an association between the stock market performance of players in a global industry and the extent of inter-firm rivalry in the product market.",

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N2 - This paper investigates the effect of oligopolistic rivalry on spillovers in financial reporting. Using an event study methodology and focusing on global airlines, we find that firms experience discernable abnormal stock price reactions at the announcement of unexpected earnings by rival airlines. The extent of the price reactions is related to the extent of rivalry between the announcing and non-announcing firms, among other factors. Our empirical evidence, which is inconsistent with the contestable markets hypothesis, confirms an association between the stock market performance of players in a global industry and the extent of inter-firm rivalry in the product market.

AB - This paper investigates the effect of oligopolistic rivalry on spillovers in financial reporting. Using an event study methodology and focusing on global airlines, we find that firms experience discernable abnormal stock price reactions at the announcement of unexpected earnings by rival airlines. The extent of the price reactions is related to the extent of rivalry between the announcing and non-announcing firms, among other factors. Our empirical evidence, which is inconsistent with the contestable markets hypothesis, confirms an association between the stock market performance of players in a global industry and the extent of inter-firm rivalry in the product market.

KW - Airlines

KW - Earnings

KW - Event study methodology

KW - Information transfer

KW - Oligopoly

KW - Stock market performance

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JO - Transportation Research Part E: Logistics and Transportation Review

JF - Transportation Research Part E: Logistics and Transportation Review

IS - 4

ER -

International oligopoly and stock market linkages: The case of global airlines

Abstract

Keywords

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