Abstract
This chapter focuses on the steps following the analysis. First, the main results have been identified, but their meaning, consequence, and implications must be derived and communicated. Second, scholars must analyze their findings to work out ‘what does this mean' and establish how to write up the results. Third, the chapter examines past studies' findings and then discusses how they can be interpreted. Several examples are provided throughout to illustrate key points being made. Finally, the chapter examines the writing process, distinguishing between writing a dissertation for examiners and articles to be read by other researchers. The writing process involves discussing the findings and extracting implications for practice and research.
TopIntroduction
A big part of any study is understanding the outcome, what was found, and the statistics. Next, as a researcher and scholar, you must make sense of the findings to be communicated to others in a dissertation or journal article. In this chapter, we step through several critical elements of this process. Ultimately, one of the primary objectives is to communicate research findings to others through publishing. Therefore, the communication of results is a critical element of this chapter.
In the other chapters, we have seen a range of different events being discussed. In some cases, the stock market reaction is negative; in other cases, the stock market reaction is positive. A range of analyses will be conducted with different results presented in a table of cross-sectional regression results in each case. However, it remains necessary to take these results and create meaning from them so it is meaningful to the reader. When we consider how the results can be interpreted, we might consider that there will be two or three primary audiences of writing the results up:
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your peers and other researchers in the area. What can the reader learn from your results; what are the implications for research and research advancement in this area?
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managers and business professionals. While they may not consume the research directly, they may source at the other (perhaps management-focused) journals. In this way, you need to explain the interesting research and theory findings and what this would mean in practice for somebody sitting in an office struggling with these management concepts and events that you have been researching.
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examiners of the thesis or dissertation for postgraduate research students. In terms of the results and findings, they want an obvious contribution to knowledge. You can demonstrate the contribution by discussing the results in the context of past studies to show how this research extends, contributes to, or conflicts with past studies.
We next look at the interpretation of the overall stock market reaction. This search for the stock market reaction is usually the first hypothesis, and the results of the estimation of abnormal returns are the primary input to this section.
TopResults – The Overall Stock Market Reaction
The expected first result reported on and interpreted is usually the overall market reaction before covering the other results. The first paragraph in the section will probably provide an overview of some of the different periods examined for the event window, giving an understanding of the mean abnormal returns. It is also valuable to report median abnormal returns, the proportion of the sample with positive negative returns, and some level of interpretation about what all of this means.
In general, the primary focus will be the event window that was used to generate the abnormal returns that were subsequently used in the cross-sectional regression. Hence, they should be reported on carefully. An example of a first paragraph outlining the primary results relating to the overall market reaction is given by Chen et al. (2021):
the abnormal returns for the day of the announcement (Day 0), the day following the announcement (Day 1), and the CARs for the two-day event period [Days (0, 1)]. The mean abnormal returns for Day 0, Day 1 and Days (0, 1) are −0.01% 0.03% and 0.03%, respectively, and statistically insignificant. The median abnormal return for Days (0, 1) is marginally negative (−0.08%) but insignificant. About 48% of the sample has positive abnormal returns, which is insignificantly different from 50%. (Chen et al., 2021, p. 1557)
There is a fairly standard reporting on some of the event windows and a little overview of the type of direction and proportion of firms reporting that finding. So, for example, in Duong et al. (2021), we see the results first noting the use of test statistics, including non-parametric tests, to establish significance, before they report that:
Key Terms in this Chapter
Stock Market Reaction: A sudden and short-lived change in the stock prices in reaction to the event. The stock market reaction, measured by the abnormal returns, is usually the focus of the main hypothesis in the event study project.
Results: The output from the models, reported as statistics. These results require additional interpretation for a robust comparison with past studies and the explanation for managers or business professionals.
Abnormal Returns: The divergence from the expected, ‘normal’ return that we would expect to see, indicating that the event has influenced the stock returns or that there is evidence of a stock market reaction.
Cross-Sectional Regression: A regression model where the abnormal returns are the dependent variable explained by the variables of interest as independent variables, where the variables are associated with one point in time. (This is in contrast to, for example, a time-series regression.)
Managerial Implications: The discussion section where the study’s implications are made clear to managers, often focused on decisions and processes that managers or other business professionals may address in their day-to-day work.
Comparison: The process of taking earlier study findings and comparing them to the current study’s findings to draw a comparison. The comparison process lets the researcher draw distinctions about where the current study confirms past results, extends them, or conflicts with them. The comparison provides a starting point for the discussion.