This study examines a sample of best managed firms for evidence on the investor overreaction hypothesis. The standard event study method supports the overreaction hypothesis. Pre-award stock excess returns are abnormally high and postaward excess returns are negative. Corrections for potential size and risk changes eliminate the negative postaward excess returns. The results support recent criticism that considers evidence of overreaction as an artifact of technical methodological flaws.
|Original language||American English|
|Journal||Quarterly Journal of Business and Economics|
|State||Published - 1992|