Measuring Reputational Risk: Market Reaction to Operational Loss Announcements in Pakistan

Authors

  • Saira Naveed

Abstract

In this research, we strive to analyze whether operati onal loss announcements in mediahave any eff ect on the stock prices and what directi on the reacti on takes with respect to theannouncement ti mings. Reputati onal loss is interpreted as when the fi rm’s market price decreaseswhen loss amounts are announced in the media known as an occurrence of an event.The research is based on Pakistan’s banking industry and a sample of eight banks have beentaken for which event study analysis and paired sample t-tests have been employed. The resultsof the research concludes that however small, operati onal loss announcements do causea market reacti on.

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Published

2015-06-01

Issue

Vol. 10 No. 1 (2015): Market Forces Research Journal Volume 10 No 1

Section

Articles

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