Event studies are a common research method in finance and management research. This note argues that the validity of inferences based on announcement effects hinges critically on controls for confounding events and appropriate statistical tests. We present a unique case where data is available for a replication of two key event studies. Specifically, we examine and show the importance of systematic confounding information on findings of the effect of corporate name changes on stock market reactions. We demonstrate that systematic confounding events are critical challenges when testing theories about investors' reactions in finance and management research.

Additional Metadata
Keywords G14, G34
Persistent URL dx.doi.org/10.1093/rof/rfv037, hdl.handle.net/1765/97253
Journal Review of Finance (Print)
de Jong, A, & Naumovska, I. (2016). A Note on Event Studies in Finance and Management Research. Review of Finance (Print), 20(4), 1659–1672. doi:10.1093/rof/rfv037