International oligopoly and stock market linkages : the case of global airlines
Document Type
Journal article
Source Publication
Transportation Research Part E: Logistics and Transportation Review
Publication Date
7-1-2008
Volume
44
Issue
4
First Page
621
Last Page
636
Publisher
Pergamon Press
Keywords
Information transfer; Airlines; Earnings; Oligopoly; Stock market performance; Event study methodology
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.
DOI
10.1016/j.tre.2007.05.008
Print ISSN
13665545
E-ISSN
18785794
Publisher Statement
Copyright © 2007 Elsevier Ltd. All rights reserved.
Additional Information
Paper presented at the 10th Annual Conference of the Air-Transport-Research-Society, May, 2006, Nagoya, Japan.
Full-text Version
Publisher’s Version
Language
English
Recommended Citation
Gong, S. X. H., Firth, M., & Cullinane, K. (2008). International oligopoly and stock market linkages: The case of global airlines. Transportation Research Part E: Logistics and Transportation Review, 44(4), 621-636. doi: 10.1016/j.tre.2007.05.008