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50 - Naming and Shaming: Evidence from Event Studies

from Part VIII - Measuring and Evaluating Compliance

Published online by Cambridge University Press:  07 May 2021

By
John Armour ,
Colin Mayer  and
Andrea Polo
Edited by
Benjamin van Rooij  and
D. Daniel Sokol
Benjamin van Rooij
Affiliation:
School of Law, University of Amsterdam
D. Daniel Sokol
Affiliation:
University of Florida
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Summary

Abstract: A firm’s ‘reputation’ reflects the expectations of its partners of the benefits of trading with it in the future. An announcement by a regulator that a firm has engaged in misconduct may be expected to impact negatively on trading parties’ (i.e. consumers or investors) expectations for a firm’s future performance, and hence on its market value. How can we identify reputational losses from share price reactions? How large are these losses for different types of misconduct? The chapter seeks to answer the above questions in the light of recent empirical evidence and draws implications for regulatory enforcement policy.

Type
Chapter
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The Cambridge Handbook of Compliance , pp. 748 - 760
Publisher: Cambridge University Press
Print publication year: 2021

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