Corporate scandals and their impact on capital markets

Varvara Zhmailova

Master's thesis

Abstract:

Corporate fraud is a relevant phenomenon in the modern world of business and law. Recently, more and more often in business circles talk about the flourishing of corporate fraud. The main goal of this Master's Thesis is to analyze how corporate scandals affect the capital market, using the example of a specific company. The methods used to achieve this Master's Thesis goal were systematic and content analysis related to qualitative methods. The methodological basis of the calculations performed in the Master's Thesis was collecting and processing statistical information, including correlation and regression analysis, based on which a multiple regression model was built. In the Master's Thesis, the nature of the concept of corporate fraud was studied, the main types of corporate fraud were highlighted, the essence of the capital market and its instrument was considered, the chronology of corporate scandals was investigated, previous studies of the dependence of corporate scandals and their consequences were studied. The result of the study was the construction of an econometric model to assess the impact of financial factors on the market capitalization of a company during a corporate scandal. Based on the obtained model, the studied theoretical and informational base of the study, the study's results and conclusions are summarized, and recommendations for the further development of the study are proposed.

Abstract:

Corporate fraud is a relevant phenomenon in the modern world of business and law. Recently, more and more often in business circles talk about the flourishing of corporate fraud. The main goal of this Master's Thesis is to analyze how corporate scandals affect the capital market, using the example of a specific company. The methods used to achieve this Master's Thesis goal were systematic and content analysis related to qualitative methods. The methodological basis of the calculations performed in the Master's Thesis was collecting and processing statistical information, including correlation and regression analysis, based on which a multiple regression model was built. In the Master's Thesis, the nature of the concept of corporate fraud was studied, the main types of corporate fraud were highlighted, the essence of the capital market and its instrument was considered, the chronology of corporate scandals was investigated, previous studies of the dependence of corporate scandals and their consequences were studied. The result of the study was the construction of an econometric model to assess the impact of financial factors on the market capitalization of a company during a corporate scandal. Based on the obtained model, the studied theoretical and informational base of the study, the study's results and conclusions are summarized, and recommendations for the further development of the study are proposed.

Keywords

Corporate fraud, corporate scandals, capital markets

Keywords

Corporate fraud, corporate scandals, capital markets

Language used: English

Date on which the thesis was submitted / produced: 28. 11. 2020

Thesis defence

• Date of defence: 9. 6. 2021
• Supervisor: Vladimír Králíček
• Reader: David Procházka

Vysoká škola ekonomická v Praze

Master programme:
Finance and Accounting