Document Type
Dissertation
First Faculty Advisor
Ketchum, David
Second Faculty Advisor
Yobaccio, Elizabeth
Keywords
event study; excess returns; stock; price;
Publisher
Bryant University
Abstract
This study seeks to answer two main questions: 1) Do product announcements impact quick service restaurant stock returns? 2) Do economic conditions impact the degree which product announcements impact quick service restaurant stock returns? 159 total product announcements were collected for 6 quick service companies: McDonald’s Corp., YUM! Brands Inc., The Wendy’s Co., AFC Enterprises Inc., Jack in the Box Inc., and Sonic Corp. 84 of these announcements were from 2005-2007 (Labeled “Pre-Recession”), and 75 were from 2009-2011 (Labeled “Post-Recession”). Using historical stock price data, an analysis of the overall trends of the mean-adjusted excess returns was conducted to determine whether or not product announcements impact the stock returns. Further analysis was conducted to determine whether the “Pre-Recession” results had different results from the “Post-Recession” results, demonstrating a difference between two different economic periods. The results showed that on average, the day following the product announcement had negative excess returns. In addition, there was a noticeable difference between “Pre-Recession” and “Post-Recession” post-announcement returns behavior. “Pre-Recession” results, on average, had positive excess returns in the 10 days following the product announcement, while “Post-Recession” results had negative excess returns in the 10 days following the product announcement.
