Announcement effect

In other words, manufacturers may have found efficiency improvements in production (less labour, different materials) while improving energy efficiency improvements in products. This is typical of findings in other industries – possibly the result of an ‘announcement effect’. i..e. the standards providing an incentive for management to think about minimising energy use.

Page 222 Hinnels and Boardman in Foxon, T, Kohler, J. and Oughton, C. (2008) Innovation For A Low Carbon Economy Economic, Institutional and Management Approaches Cheltenham: Edward Elgar

or, more specifically to do with investment

DEFINITION of ‘Announcement Effect’

The impact on markets from the news that a change will occur at some future date. It can be used as a general term for the reaction to any development that affects trading, such as a change in dividend policy or a stock split. It is most often used, however, to describe investor reactions to changes in monetary policy, such as a hike or cut in a key interest rate level.

Also known as a “signal effect.”

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