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.
|Number of pages||14|
|Journal||Review of Finance|
|Publication status||Published - 2015|