1. Revisions of international firms’ energy reserves and the reaction of the stock market
- Author
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Scholtens, Bert and Wagenaar, Robert
- Subjects
- *
STOCK exchanges , *FINANCIAL market reaction , *INTERNATIONAL business enterprises , *RESERVES (Accounting) , *MARKET value , *ESTIMATION theory , *FORCE & energy - Abstract
Abstract: Energy companies can adjust the estimation of their reserves. We investigate how these revisions impact on the value of these firms. We analyze 100 revisions in seventeen countries for the period 2000-2010. We use an event study and find that the revisions of energy reserves significantly impact on the market value of the firm. We also discover an asymmetry in this response as the market’s reaction to downward revisions is much larger than that to upward revisions. Furthermore, the response to revisions in Australia, Canada, UK and US is smaller than that in the other 13 countries and the response is smaller in the years with turmoil on the energy markets. [Copyright &y& Elsevier]
- Published
- 2011
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