Information spill-over or stereotyping amongst Singapore investors : an empirical investigation on the impact of the China Aviation Oil (CAO) incident on other listed China-based firms in Singapore.
Lee, Joseph Han Chiang.
Koh, Victor Jia Hui.
Date of Issue2006
College of Business (Nanyang Business School)
Inspired by the recent China Aviation Oil (CAO) debacle and the concern of the effectiveness of the firm’s corporate governance and corporate reporting, our research seeks to analyze and understand if some of the news affecting CAO have any information spillover effect on the values of other China-based firms listed on the Singapore Exchange (SGX). We match each of the China-based firms with a non China-based firm by industry and asset size. We identify 7 events affecting CAO, which include those with only CAO specific information/implication and those that contain wider implications. Our analyses on the abnormal returns and cumulative abnormal returns of 18 pairs of sample and control firms show that investors in Singapore are generally sophisticated and they are capable of distinguishing events that are CAO specific from those that contain wider implications. Our study offers an additional evidence to support the general assumption of sophisticated and diligent financial statement users in the conceptual framework of financial accounting.
Final Year Project (FYP)
Nanyang Technological University