Capital market behavior and operational announcements of layoffs, operation closings, and pay cuts

Ji-chai Lin, Michael S. Rozeff

Research output: Journal article publicationJournal articleAcademic researchpeer-review

23 Citations (Scopus)


This article examines the relation between stock returns and a set of operating decisions: layoffs, operation closings, and pay cuts. We find evidence that cost-cutting measures occur after significant stock price declines. Announcements of layoffs and temporary operation closings are associated with negative returns, while permanent operation closings do not have significant announcement effects.
Original languageEnglish
Pages (from-to)29-45
Number of pages17
JournalReview of Quantitative Finance and Accounting
Issue number1
Publication statusPublished - 1 Mar 1993
Externally publishedYes


  • cost-cutting
  • operation closings
  • shareholder wealth

ASJC Scopus subject areas

  • Accounting
  • Business, Management and Accounting(all)
  • Finance

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