The Impact of Ting-Hsin Provisions on Stock Prices of Listed Firms in the Food Industry

• Main Authors: Hsu,Liang-Chi, 許良吉
• Other Authors: Chen,Chieh- Shou
• Format: Others
• Language: zh-TW
• Published: 2016
• Online Access: http://ndltd.ncl.edu.tw/handle/68567136518462299630

碩士 === 國立彰化師範大學 === 會計學系 企業高階管理(EMBA) === 104 === Abstract This study focuses on whether the event of Ting Hsin International Group related to the sale of tainted cooking oil and the event related to the legislation of Ting Hsin provisions have information content in Taiwanese stock market. This study uses daily stock returns of Taiwanese listed companies in the food industry, and employs the event study to explore investors’ reactions to the tainted cooking oil reported and Ting Hsin provisions legislated. The empirical results show that: (1) the companies in the food industry have significantly negative abnormal returns when the sale of tainted cooking oil of Ting Hsin International Group is reported, implying investors predict that the short-term performation of the food industry will be bad because of this serious food scandal, and the market reaction seems to underreact, (2) the companies in the food industry have significantly negative abnormal returns to the event that Ting Hsin provisions are first reading legally, and the market responds in advance and underreacts, implying investors predict that the short-term performation of the food industry will be bad because of the severe Ting Hsin prvisions are revised and first read legally, and (3) the companies in the food industry have significantly negative abnormal returns before Ting Hsin provisions are legislated, but the market reaction is not worse after the legislation date, implying the bad news is ending. Briefly, this study finds that the stock prices in the food industry have information content to the serious food scandal and severe povisions. Keywords: Tainted cooking oil, Ting Hsin provision, Food scandal, Event study, Abnormal return