Determinants of Telecommunication Stock Prices

Journal of Economic Studies. Vol 42, Issue 4, 2015

Posted: 10 Nov 2013 Last revised: 27 Aug 2015

See all articles by Andros Gregoriou

Andros Gregoriou

University of Brighton

Jerome Healy

Hull University Business School (HUBS)

Jairaj Gupta

University of Birmingham

Date Written: July 1, 2014

Abstract

Purpose – In this paper, we analyse the determinants affecting the stock prices of telecommunications firms in both developed and developing countries around the world.

Design/methodology/approach – The empirical analysis is performed using panel data from 160 countries and 45 companies, covering the time period from 2000 to 2011. To identify the significant factors, company level firm specific financial and non-financial factors have been analysed that are expected to bear significant impact on price volatility of telecommunications stock.

Findings – Our test results reveal that capital expenditure and book value are the most significant factors. Dividends and debt levels only affect prices significantly in specification tests with either time-series or cross-sectional effects, whereas firms’ earnings and numbers of mobile Internet subscribers do not contribute to the explanatory power of telecommunication stock price variability.

Practical implications – Our study sheds light to the potential investors to evaluate the risk associated with investment in stocks of telecommunications firms and take informed investment decisions.

Originality/value – This is the first study that presents a comprehensive analysis of the determinants affecting the stock prices of telecommunications firms in both developed and developing countries around the world.

Keywords: telecommunications, stock prices, mobile internet, telecom, determinants

JEL Classification: C23, D12, L96, O33

Suggested Citation

Gregoriou, Andros and Healy, Jerome and Gupta, Jairaj, Determinants of Telecommunication Stock Prices (July 1, 2014). Journal of Economic Studies. Vol 42, Issue 4, 2015, Available at SSRN: https://ssrn.com/abstract=2352269 or http://dx.doi.org/10.2139/ssrn.2352269

Andros Gregoriou

University of Brighton ( email )

Brighton
Brighton, BN2 4AT
United Kingdom

Jerome Healy

Hull University Business School (HUBS) ( email )

Hull, HU6 7RX
United Kingdom

Jairaj Gupta (Contact Author)

University of Birmingham ( email )

Edgbaston, Birmingham B15 2TT
United Kingdom
00-44-7795904913 (Phone)

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