EFFECT OF ANNOUNCEMENTS OF WITHDRAWAL FROM SOUTH AFRICA ON STOCKHOLDER WEALTH.

Abstract
In this study, we analyzed investor reaction to corporate announcements of withdrawal from South Africa to determine whether such announcements increased or reduced firms' market value. We also examined the effect of the timing of the announcements on stock valuation. The announcements were associated with a significant drop in the value of the withdrawing firms' stock, particularly for firms withdrawing earlier in the debate surrounding the issue of withdrawal. These results suggest that managers were considering the interests of groups other than stockholders in their decisions to withdraw. Implications of the results for stakeholder theory are discussed.