Determinants of telecommunication stock prices

Andros Gregoriou, Jerome Healy, Jairaj Gupta

Research output: Contribution to journalArticlepeer-review

Abstract

The purpose of this paper is to analyze 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 analyzed that are expected to bear significant impact on price volatility of telecommunications stock. Findings – The 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 – The study sheds light to the potential investors in evaluating 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 determinants affecting the stock prices of telecommunications firms in both developed and developing countries around the world.
Original languageEnglish
Pages (from-to)534-548
Number of pages15
JournalJournal of Economic Studies
Volume42
Issue number4
DOIs
Publication statusPublished - 1 Jan 2015

Keywords

  • Telecommunications
  • Stock prices
  • Determinants
  • Mobile internet
  • Telecom

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