Plant-closing decisions and the market value of the firm

David W. Blackwell; M. Wayne Marr; Michael F. Spivey

doi:10.1016/0304-405X(90)90006-L

Plant-closing decisions and the market value of the firm

David W. Blackwell, M. Wayne Marr, Michael F. Spivey

Research output: Contribution to journal › Article › peer-review

91 Scopus citations

Abstract

We investigate the underlying causes and the announcement effects of plant closings. The closing in our sample do not appear related to takeover activity. Instead, they appear motivated by declining firm profitability. Firms announcing closings have lower earnings than market or industry medians; earnings typically improve slightly after the announcement. We find a negative stock-market reaction to plant-closing announcements.

Original language	English
Pages (from-to)	277-288
Number of pages	12
Journal	Journal of Financial Economics
Volume	26
Issue number	2
DOIs	https://doi.org/10.1016/0304-405X(90)90006-L
State	Published - Aug 1990

ASJC Scopus subject areas

Accounting
Finance
Economics and Econometrics
Strategy and Management

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10.1016/0304-405X(90)90006-L

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title = "Plant-closing decisions and the market value of the firm",

abstract = "We investigate the underlying causes and the announcement effects of plant closings. The closing in our sample do not appear related to takeover activity. Instead, they appear motivated by declining firm profitability. Firms announcing closings have lower earnings than market or industry medians; earnings typically improve slightly after the announcement. We find a negative stock-market reaction to plant-closing announcements.",

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N2 - We investigate the underlying causes and the announcement effects of plant closings. The closing in our sample do not appear related to takeover activity. Instead, they appear motivated by declining firm profitability. Firms announcing closings have lower earnings than market or industry medians; earnings typically improve slightly after the announcement. We find a negative stock-market reaction to plant-closing announcements.

AB - We investigate the underlying causes and the announcement effects of plant closings. The closing in our sample do not appear related to takeover activity. Instead, they appear motivated by declining firm profitability. Firms announcing closings have lower earnings than market or industry medians; earnings typically improve slightly after the announcement. We find a negative stock-market reaction to plant-closing announcements.

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Plant-closing decisions and the market value of the firm

Abstract

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