Market reaction to published and non-published corporate loan announcements

J. Fery, D. Gasbarro, David Woodliff, K. Zumwalt

Research output: Contribution to journalArticle

14 Citations (Scopus)

Abstract

Prior research examining the role of financial intermediaries in reducing the problems of information asymmetry has reported that borrowers experience a positive share price reaction to credit agreement announcements. However, it is generally acknowledged that these studies have the potential for a reporting bias because they use only one source of information for credit agreement announcements. To examine this reporting bias, we distinguish between “published” and “non-published” announcements in Australia. We find that borrowers’ share prices react positively to announcements that are published in both the financial press and by a dedicated information provider. No statistically significant reaction is observed for the non-published credit agreements.
Original languageEnglish
Pages (from-to)1-10
JournalThe Quarterly Review of Economics and Finance
Volume43
Issue number1
DOIs
Publication statusPublished - 2003

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