Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments September 27, 2022 erstellt
Beschreibung:
The link between the 2010 Global Financial Crisis and the excessive risk-taking of financial institutions has generated much public intolerance towards any further corporate malpractice within these companies. The manner in which such corporations mitigate many types of reputational risk and negative media coverage is therefore considered, particularly during periods of economic contraction and negative consumer sentiment. Specifically, this research sets out to establish whether the presence of recession influences investor response to negative media releases and broad reputationally damaging events focused upon financial institutions. Results indicate the existence of significant dynamic interactions of both returns and abnormal returns when comparing expansionary and contractionary economic conditions. The most severe, broadest reaching, and directly related news releases are found to generate even more depressed, persistent differentials of stock market response. Such results shed light on a slow-paced time evolution as to the restoration of semi-strong market efficiency during extreme negative information shocks, which are heterogeneously pronounced during the recession, thereby creating additional incentive for financial institutions to delay, or shroud the release of damaging information until economic conditions better facilitate a more forgiving investor response