Speaker: Vinod Singhal, Professor, Coordinator for MS with a Major in Management, Georgia Institute of Technology
Venue: ZOOM, ID: 935 6048 9231, code: 375983
Abstract:
In this talk, Professor Vinod Singhal will share his study on the empirical evidence on the effect of the September 2015 Volkswagen diesel emissions scandal on the stock prices of publicly traded firms in the global automotive ecosystem. Focus on the supply chain partners, business customers of VW, and other manufacturers not identified as VW suppliers; and wholesalers, retailers, and rental agencies not identified as VW customers. They find that tier-1 suppliers of direct material to VW suffered a negative stock price reaction, but this effect varied by region. European suppliers were the most impacted with a mean stock price reaction of ‒5.52%. Suppliers with larger revenue dependence on VW experienced greater negative stock price reactions, as did suppliers of components for engines and/or emissions systems. Non-VW parts manufacturers experienced a positive effect. We find a mean stock price reaction of ─5.28% to VW’s European customers, but no significant effects for non-VW customers. European motor vehicle manufacturers experienced a mean stock price reaction of ‒7.60%. Their work has implications for industry groups, regulators, and legal systems, entities that have the resources and capabilities to effectively monitor large firms to reduce illegal or irresponsible behavior such as the VW scandal.