The event study of the announcement effect of capital reduction by Corporate Law in Taiwan
Date Issued
2007
Date
2007
Author(s)
Lin, Wei-Li
DOI
zh-TW
Abstract
This is an empirical study to discuss whether the first announcement of the capital reduction by the Corporate Law in an industry affected the stock prices of the other companies in the same industry. Providing the several events of capital reduction by the Corporate Law occurred since 2006 in Taiwan, I use the event study and the regression model to show the announcement effects and to discuss different factors which may affect these effects. Since several events occurred in different industries, I classified them into several categories basing on their industries and examined their results, respectively.
The empirical result shows that there was the positive effect when a capital reduction by the Corporate Law first announced in an industry. In the optoelectronic industry, the companies which have higher ratios of the foreign institutions shares have larger positive reactions; In the integrated circuit design, chemical and tourism industry, the companies which have higher ratios of the main shares have larger positive reactions; In the tourism industry, the companies which have higher ratios of cash and other short-term realizable assets have larger positive reactions; In the optoelectronic, integrated circuit design, integrated circuit, chemical and tourism industry, the companies which have higher ratios of cash dividend have larger positive reactions. The regression model also shows the consistent results. Thus, different industries supported partial hypotheses respectively in this paper. It shows that since industries have different characteristics, several factors have different degrees of effects.
Subjects
現金減資
庫藏股買回
capital reduction
stock repurchase
Type
thesis