That is one of the conclusions drawn by economist Leon Zolotoy in his research, for which he will be awarded a PhD at Tilburg University in the Netherlands on 25 June. Zolotoy researched how international stock markets react to new information.
The Sarbanes-Oxley Act was introduced in July 2002, partly as a result of the corporate scandals involving WorldCom, Enron, Tyco and QWest. The Act’s strict disclosure requirements were designed to restore investors’ and analysts’ confidence in the stock market.
Economist Leon Zolotoy studied the effect of this legislation, in particular how quickly company information is impounded in stock prices. According to his analyses, the speed of adjustment is increasing, which implies that the American stock markets have become more efficient in terms of information. At the same time, however, analysts’ company earnings forecasts have become more pessimistic. Zolotoy concludes that analysts have become more cautious in interpreting the information released by companies.
On a more general level, Zolotoy believes that the speed with which share prices respond to new information is strongly related to both the timing of information disclosure and to legislation. Stock markets can be made more efficient via legislation such as the American Sarbanes-Oxley Act. Zolotoy also argues that the timing of bad-news disclosures by companies is gradually becoming less important, as evident in the gradual decline of the ‘Friday effect’, for example. Companies have tended to release bad news on a Friday rather than on any other day on the assumption that traders will not react to the news immediately due to the approaching weekend. However, Zolotoy’s research shows that the benefits of this strategy appear to have diminished strongly over time.
Leon Zolotoy (1977, Moscow, Russia) studied Economics and Business Administration at the Ben-Gurion University in Israel (MA summa cum laude). He began his PhD research in 2005 at the CentER for Economic Research at Tilburg University. Part of his research was carried out at the Leonard N. Stern School of Business at New York University. In September 2008, Zolotoy will take up the post of Assistant Professor / Senior Lecturer at the Melbourne Business School in Australia.
Corine Schouten | alfa
Europe's microtechnology industry is attuned to growth
10.03.2017 | IVAM Fachverband für Mikrotechnik
Preferential trade agreements enhance global trade at the expense of its resilience
17.02.2017 | International Institute for Applied Systems Analysis (IIASA)
Astronomers from Bonn and Tautenburg in Thuringia (Germany) used the 100-m radio telescope at Effelsberg to observe several galaxy clusters. At the edges of these large accumulations of dark matter, stellar systems (galaxies), hot gas, and charged particles, they found magnetic fields that are exceptionally ordered over distances of many million light years. This makes them the most extended magnetic fields in the universe known so far.
The results will be published on March 22 in the journal „Astronomy & Astrophysics“.
Galaxy clusters are the largest gravitationally bound structures in the universe. With a typical extent of about 10 million light years, i.e. 100 times the...
Researchers at the Goethe University Frankfurt, together with partners from the University of Tübingen in Germany and Queen Mary University as well as Francis Crick Institute from London (UK) have developed a novel technology to decipher the secret ubiquitin code.
Ubiquitin is a small protein that can be linked to other cellular proteins, thereby controlling and modulating their functions. The attachment occurs in many...
In the eternal search for next generation high-efficiency solar cells and LEDs, scientists at Los Alamos National Laboratory and their partners are creating...
Silicon nanosheets are thin, two-dimensional layers with exceptional optoelectronic properties very similar to those of graphene. Albeit, the nanosheets are less stable. Now researchers at the Technical University of Munich (TUM) have, for the first time ever, produced a composite material combining silicon nanosheets and a polymer that is both UV-resistant and easy to process. This brings the scientists a significant step closer to industrial applications like flexible displays and photosensors.
Silicon nanosheets are thin, two-dimensional layers with exceptional optoelectronic properties very similar to those of graphene. Albeit, the nanosheets are...
Enzymes behave differently in a test tube compared with the molecular scrum of a living cell. Chemists from the University of Basel have now been able to simulate these confined natural conditions in artificial vesicles for the first time. As reported in the academic journal Small, the results are offering better insight into the development of nanoreactors and artificial organelles.
Enzymes behave differently in a test tube compared with the molecular scrum of a living cell. Chemists from the University of Basel have now been able to...
20.03.2017 | Event News
14.03.2017 | Event News
07.03.2017 | Event News
27.03.2017 | Health and Medicine
27.03.2017 | Life Sciences
27.03.2017 | Earth Sciences