Stock Market reaction to the CSR announcements of American fast food companies

The purpose of this study is to examine whether Corporate Social Responsibility (CSR) announcements of the three biggest American fast food companies (McDonald’s, YUM! Brands and Wendy’s) have any effect on their stock returns as well as on the returns of the industry index (Dow Jones Restaurants and Bars). The time period under consideration starts on 1st of May 2001 and ends on 17th of October 2013. The stock market reaction is tested with an event study utilizing CAPM. The research employs the daily stock returns of the companies, the index and the benchmarks (NASDAQ and NYSE). The test of combined announcements did not reveal any significant effect on the index and McDonald’s. However the stock returns of Wendy’s and YUM! Brands reacted negatively. Moreover, the company level analyses showed that to their own CSR releases McDonald’s stock returns respond positively, YUM! Brands reacts negatively and Wendy’s does not have any reaction. Plus, it was found that the competitors of the announcing company tend to react negatively to all the events. Furthermore, the division of the events into sustainability categories showed statistically significant negative reaction from the Index, McDonald’s and YUM! Brands towards social announcements. At the same time only the index was positively affected by to the economic and environmental CSR news releases.

Information Content of Bank Credit Rating Changes: Evidence from Europe

This thesis examines the short-term impact of credit rating announcements on daily stock returns of 41 European banks indexed in STOXX Europe 600 Banks. The time period of this study is 2002–2015 and the ratings represent long-term issuer ratings provided by S&P, Moody’s and Fitch. Bank ratings are significant for a bank’s operation costs so it is interesting to investigate how investors react to changes in creditworthiness. The study objective is achieved by conducting an event study. The event study is extended with a cross-sectional linear regression to investigate other potential determinants surrounding rating changes. The research hypotheses and the motivation for additional tests are derived from prior research. The main hypotheses are formed to explore whether rating changes have an effect on stock returns, when this possible reaction occurs and whether it is asymmetric between upgrades and downgrades. The findings provide evidence that rating announcements have an impact on stock returns in the context of European banks. The results also support the existence of an asymmetry in capital market reaction to rating upgrades and downgrades. The rating downgrades are associated with statistically significant negative abnormal returns on the event day although the reaction is rather modest. No statistically significant reaction is found associated with the rating upgrades on the event day. These results hold true with both rating changes and rating watches. No anticipation is observed in the case of rating changes but there is a statistically significant cumulative negative (positive) price reaction occurring before the event day for negative (positive) watch announcements. The regression provides evidence that the stock price reaction is stronger for rating downgrades occurring within below investment grade class compared with investment grade class. This is intuitive as investors are more concerned about their investments in lower-rated companies. Besides, the price reaction of larger banks is more mitigated compared with smaller banks in the case of rating downgrades. The reason for this may be that larger banks are usually more widely followed by the public. However, the study results may also provide evidence of the existence of the so-called “too big to fail” subsidy that dampens the negative returns of larger banks.

Mobile marketing process of an international event – Case: Falun2015 FIS Nordic World Ski Championships

Any other technology has never affected daily life at this level and witnessed as speedy adaptation as the mobile phone. At the same time, mobile media has developed to be a serious marketing tool for all kinds of businesses, and the industry has grown explosively in recent years. The objective of this thesis is to inspect the mobile marketing process of an international event. This thesis is a qualitative case study. The chosen case for this thesis is the mobile marketing process of Falun2015 FIS Nordic World Ski Championships due to researcher’s interest on the topic and contacts to the people around the event. The empirical findings were acquired by conducting two interviews with three experts from the case organisation and its partner organisation. The interviews were performed as semi-structured interviews utilising the themes arising from the chosen theoretical framework. The framework distinguished six phases in the process: (i) campaign initiation, (ii) campaign design, (iii) campaign creation, (iv) permission management, (v) delivery, and (vi) evaluation and analysis. Phases one and five were not examined in this thesis because campaign initiation was not purely seen as part of the campaign implementation, and investigating phase five would have required a very technical viewpoint to the study. In addition to the interviews, some pre-established documents were exploited as a supporting data. The empirical findings of this thesis mainly follow the theoretical framework utilised. However, some modifications to the model could be made mainly related to the order of different phases. In the revised model, the actions are categorised depending on the time they should be conducted, i.e. before, during or after the event. Regardless of the categorisation, the phases can be in different order and overlapping. In addition, the business network was highly emphasised by the empirical findings and is thus added to the modified model. Five managerial recommendations can be concluded from the empirical findings of this thesis: (i) the importance of a business network should be highly valued in a mobile marketing process; (ii) clear goals should be defined for mobile marketing actions in order to make sure that everyone involved is aware them; (iii) interactivity should be perceived as part of a mobile marketing communication; (iv) enough time should be allowed for the development of a mobile marketing process in order to exploit all the potential it can offer; and (v) attention should be paid to measuring and analysing matters that are of relevance