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- Title
Using Stock Prices to Predict Market Events: Evidence on Sales Takeoff and Long-Term Firm Survival.
- Authors
Markovitch, Dmitri G.; Golder, Peter N.
- Abstract
We evaluate whether stock prices can predict the sales takeoff and the long-term survival of firms at takeoff. We find that abnormal returns are strongly positive in the year prior to takeoff, thus suggesting an Important signal of the takeoff. Moreover, we find that negative abnormal returns in the year of takeoff and one year after takeoff increase the hazard of market exit by 9.5 times relative to firms without these negative abnormal returns. We discuss the implications of these findings for managers and researchers.
- Subjects
STOCK prices; ECONOMIC forecasting; NEW product development; RATE of return; MARKET exit; MARKETING science
- Publication
Marketing Science, 2008, Vol 27, Issue 4, p717
- ISSN
0732-2399
- Publication type
Article
- DOI
10.1287/mksc.1070.0325