Year: 2024
Type: article
Abstract: In this paper, we investigate whether strike events affect stock market outcomes.Specifically, we employ the event study technique to examine the impact that Britain's biggest rail strike in 30 years had on stock market returns.In employing this technique, we use two methods: mean-adjusted returns and the market model.The results indicate that the event had a significant negative effect on stock market returns: the average cumulative abnormal returns (CARs) ranged from negative 108.2 basis points to negative 23,137 basis points using the mean-adjusted returns method.Alternatively, employing the market model, average CARs ranged from negative 54 basis points to negative 156 basis points, also suggesting that the event had a significant negative effect on stock market returns.The findings show a negative trend in CARs among the components of the FTSE 250, implying a significant negative impact of Britain's rail strike.Such findings can provide insights for policymakers and governments to inform strategies and regulations to avoid such disturbances to the economy in the future. Mean-adjusted returns 𝑪𝑨𝑹 𝒊,𝒅Market model 𝑪𝑨𝑹 𝒊,𝒅 Mean Median Skewness Kurtosis Mean Median Skewness Kurtosis -10 -0.
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: bronze
OpenAlex ID: W4401536629