The long-term performance of new product introductions

Li Yu Chen, Jung Ho Lai, Shao-Chi Chang

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

This study investigates the long-term stock market performance of firms following announcements of new product introductions (NPIs). We find that firms announcing NPIs experience significantly positive abnormal stock returns in the three- and five-year post-announcement periods. Further, firms’ marketing capabilities and industry background, firm size, and the timing new products are introduced significantly affect shareholder gains from NPIs. The Carhart four-factor model, the zero-investment portfolio method, and the buy-and-hold return procedure yield consistent results. Our findings show that investors on average do not fully capture the valuation impact of new products nor incorporate the information contained in the initial announcements.

Original languageEnglish
Pages (from-to)162-169
Number of pages8
JournalFinance Research Letters
Volume20
DOIs
Publication statusPublished - 2017 Feb 1

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Long-term performance
Announcement
New product introduction
New products
Investors
Stock returns
Investment portfolio
Firm size
Marketing capabilities
Stock market performance
Shareholders
Industry

All Science Journal Classification (ASJC) codes

  • Finance

Cite this

Chen, Li Yu ; Lai, Jung Ho ; Chang, Shao-Chi. / The long-term performance of new product introductions. In: Finance Research Letters. 2017 ; Vol. 20. pp. 162-169.
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The long-term performance of new product introductions. / Chen, Li Yu; Lai, Jung Ho; Chang, Shao-Chi.

In: Finance Research Letters, Vol. 20, 01.02.2017, p. 162-169.

Research output: Contribution to journalArticle

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