Literature Review Women on boards and in TMTS and firm performance 135 5 5 Methodology The event study methodology goes back to Fama Fisher Jensen and Roll 1969 and is still emplo yed today very frequently The event study mea sures the impact of new unexpected information on a company s share price Assuming information efficiency on capital markets it is to determine whether the disclosure of new information leads to excess returns on the announcement date or within an event window The excess or abnormal return ARi t of a layoff announcement i represents the difference between the actual return Ri t on the event day t and the expected return E Ri t 1 ARi t Ri t E Ri t The expected return is composed of two parts the market return and the stock specific return Several options for estimating the market return are available including the market model the market adjusted model and the constant mean return model Neus Walter 2009 The present s tudy uses the market model I use the Post Crisis covers events during the period after the financial crisis defined as July 2009 to December 2014 Strict labor law is a country s strictness of employment protection legislation according to OECD data 2016a Countries with a value of below 2 are coded non strict countries with a value of 2 or above are coded strict Investment banking indicates if employees from this division are to be made redun dant Branches indicates if layoffs occur in the course of branch closures M A are layoff announcements linked to merger and acquisition activities whereas Reorganization comprises announcements related to restructuring efforts Cost Cutting indicates that cost reduction is the primary layoff reason Fall in Demand indicates that the announced layoffs are response to a decline in demand for the bank s products and Poor Past Performance indicates that staff cuts are attributable to poor recent financial performance Other reasons includes reasons that cannot be assigned to one of the other categories Proactive is a reduction in workforce carried out on the bank s own initiative Reactive is a reduction in workforce in response to a crisis situation that has already occured Total assets WC02999 are the total assets of the firm in thousands of US dollars USD on the last trading day in the year prior to the layoff announcement Assets Employee WC08406 is total assets in thousands of USD divided by the total number of employees on the last trading day in the year prior to the layoff announcement Sales Employee WC08351 is net sales per employee in thousands of USD Personnel Exp Employee is personnel expenses in thousands of US di vided by the total number of employees on the last trading day in the year prior to the layoff announcement Return on equity WC08301 is Net Income Bottom Line Preferred Dividend Requirement Average of Last Year s and Current Year s Common Equity 100 Cost income ratio is total non interest expenses total non interest operating income equity accounted profit loss operating net interest income Employees WC07011 is the number of employees on the last trading day in the year prior to the layoff announcement United States are layoffs by banks headquartered in the United States of America Europe are layoffs by banks headquartered in Western Europe Table 5 3 continued value weighted market index for each relevant country Total Return Index provided by Thomson Financial Datastream as market return The Total Return Indices represent country specific price in dices adjusted for changes in capital structure and dividend payments The two components market return and stock specific return can be displayed using a linear regression model from historical re turn data The share of the expected return that is driven by overall stock market performance is expressed by the product β1 Rm t The share that reflects the average stock specific return indepen dent of market movements is measured by αi 2 E Ri t αi β1 Rm t εi t Parameters αi and β1 can be estimated for every event by an ordinary least squares model OLS model using an interval of 250 trading days prior to the event window Fraunhoffer et al 2014 Hillier et al 2007 Knauer Lachmann 2011 Nixon et al 2004 This interval compri ses approximately a full calendar year The exact Layoffs and shareholder wealth

Vorschau DIRK-Forschungsreihe Band 21 Workforce diversity and personal policies Seite 135
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