An analysis of the stock market reaction to the announcements of the UK Soft Drinks Industry Levy
dc.contributor.author | Law, C | |
dc.contributor.author | Cornelsen, L | |
dc.contributor.author | Adams, J | |
dc.contributor.author | Penney, T | |
dc.contributor.author | Rutter, H | |
dc.contributor.author | White, M | |
dc.contributor.author | Smith, R | |
dc.date.accessioned | 2020-03-19T10:06:16Z | |
dc.date.issued | 2020-02-17 | |
dc.description.abstract | On 16th March 2016, the government of the United Kingdom announced the Soft Drinks Industry Levy (SDIL), under which UK soft-drink manufacturers were to be taxed according to the volume of products with added sugar they produced or imported. We use ‘event study’ methodology to assess the likely financial effect of the SDIL on parts of the soft drinks industry, using stock returns of four UK-operating soft-drink firms listed on the London Stock Exchange. We found that three of the four firms experienced negative abnormal stock returns on the day of announcement. A cross-sectional analysis revealed that the cumulative abnormal returns of soft drink stocks were not significantly less than that of other food and drinks-related stocks beyond the day of the SDIL announcement. Our findings suggest that the SDIL announcement was initially perceived as detrimental news by the market but negative stock returns were short-lived, indicating a lack of major concerns for industry. There was limited evidence of a negative stock market reaction to the two subsequent announcements: release of draft legislation on 5th December 2016, and confirmation of the tax rates on 8th March 2017. | en_GB |
dc.description.sponsorship | UK National Institute for Health Research, Public Health Research programme | en_GB |
dc.identifier.citation | First published online 17 February 2020 | en_GB |
dc.identifier.doi | 10.1016/j.ehb.2019.100834 | |
dc.identifier.grantnumber | 16/49/01 | en_GB |
dc.identifier.grantnumber | 16/130/01 | en_GB |
dc.identifier.uri | http://hdl.handle.net/10871/120328 | |
dc.language.iso | en | en_GB |
dc.publisher | Elsevier | en_GB |
dc.rights | © 2020. This version is made available under the CC-BY-NC-ND 4.0 license: https://creativecommons.org/licenses/by-nc-nd/4.0/ | en_GB |
dc.subject | Soda tax | en_GB |
dc.subject | Industry levy | en_GB |
dc.subject | Event study | en_GB |
dc.subject | Soft-drinks | en_GB |
dc.subject | Tax impact | en_GB |
dc.subject | Stock return | en_GB |
dc.title | An analysis of the stock market reaction to the announcements of the UK Soft Drinks Industry Levy | en_GB |
dc.type | Article | en_GB |
dc.date.available | 2020-03-19T10:06:16Z | |
dc.identifier.issn | 1570-677X | |
dc.description | This is the final version. Available from Elsevier via the DOI in this record. | en_GB |
dc.identifier.eissn | 1873-6130 | |
dc.identifier.journal | Economics and Human Biology | en_GB |
dc.rights.uri | https://creativecommons.org/licenses/by-nc-nd/4.0/ | en_GB |
dcterms.dateAccepted | 2019-12-06 | |
rioxxterms.version | VoR | en_GB |
rioxxterms.licenseref.startdate | 2019-12-06 | |
rioxxterms.type | Journal Article/Review | en_GB |
refterms.dateFCD | 2020-03-19T09:59:21Z | |
refterms.versionFCD | VoR | |
refterms.dateFOA | 2020-03-19T10:06:22Z | |
refterms.panel | A | en_GB |
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Except where otherwise noted, this item's licence is described as © 2020. This version is made available under the CC-BY-NC-ND 4.0 license: https://creativecommons.org/licenses/by-nc-nd/4.0/