Aerospace Competition, Investor Attention, and Stock Return Comovement

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aut.relation.endpage59
aut.relation.journalJournal of Economic Behavior and Organization
aut.relation.startpage40
aut.relation.volume215
dc.contributor.authorDo, HX
dc.contributor.authorNguyen, NH
dc.contributor.authorNguyen, QMP
dc.contributor.authorTruong, C
dc.date.accessioned2023-09-27T02:49:57Z
dc.date.available2023-09-27T02:49:57Z
dc.date.issued2023-11-01
dc.description.abstractFierce aerospace competition among global superpowers has resulted in strong public attention on satellite launch events in the U.S. Given limited attentional resources, U.S. investors pay more attention to market-level shocks than to firm-specific shocks, making stock returns comove more with the market on satellite launch days than on other days. We find that the effect is significantly stronger for military-related satellite launches, launches before the dissolution of the former Soviet Union, and international satellite launches by other competitors, highlighting a greater concern for national security. A trading strategy that exploits the potential satellite-induced mispricing yields an annualized abnormal risk-adjusted return of up to 17% within the three-day window around launch date. Our results are robust to a battery of robustness analyses that consider the different characteristics of satellite launches, the exclusion of aerospace firms, and stock return comovement with industries.
dc.identifier.citationJournal of Economic Behavior and Organization, ISSN: 0167-2681 (Print), Elsevier BV, 215, 40-59. doi: 10.1016/j.jebo.2023.09.005
dc.identifier.doi10.1016/j.jebo.2023.09.005
dc.identifier.issn0167-2681
dc.identifier.urihttp://hdl.handle.net/10292/16722
dc.languageen
dc.publisherElsevier BV
dc.relation.urihttps://www.sciencedirect.com/science/article/pii/S0167268123003220
dc.rights.accessrightsOpenAccess
dc.rights.urihttp://creativecommons.org/licenses/by/4.0/
dc.subject38 Economics
dc.subject3502 Banking, Finance and Investment
dc.subject3801 Applied Economics
dc.subject35 Commerce, Management, Tourism and Services
dc.subject1401 Economic Theory
dc.subject1402 Applied Economics
dc.subject1403 Econometrics
dc.subjectEconomics
dc.subject3502 Banking, finance and investment
dc.subject3801 Applied economics
dc.titleAerospace Competition, Investor Attention, and Stock Return Comovement
dc.typeJournal Article
pubs.elements-id524135
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