Table 2 computer network and information technology

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Table 2 Computer Network and Information Technology services Firms (Average Rank Order Value of Returns) Firm T-values (p-value) Period 1 8/96 -3/98 Period 2 4/98 -11/99 Period 3 12/99 -7/01 Period 4 8/01 - 3/03 Period 5 4/03- 11/04 Period 6 12/04 - 8/06 COMS 27.23 (.01) 53.5* 43.8 - 57.7* 81.3*** 71.2** 55.7* CSCO 30.43 (.001) 80.4** 99.3*** 37.0* 24.5 - 82.5** 39.3* ERIC 35.37 (.01) 90.6** 58.0* 49.2* 17.2 - 103.8*** 51.2* NT 33.72 (.01) 95.9*** 67.4** 43.3* 25.2 - 92.5*** 38.8* YHOO 39.62 (.01) 82.3** 97.1*** 10.8 - 50.9* 80.2** 41.4* Notes: The first column is a listing of the ticker symbols for the five computer network and information technology services companies included in the study. The second column is the value of the equation (5) test statistic and p-value for each company, which determines if there is a statistical difference in stock market returns across the six periods. Columns three through eight present the average rank value of the stock market returns for the six periods of the study. Asterisk(*) and negative signs (-) signify difference in average rank values as follows: *** Indicates period with highest statistically significant return derived from equation 6. ** Indicates period with second highest statistically significant return derived from equation 6. * Indicates period with third highest statistically significant return derived from equation 6. - Indicates period with lowest statistically significant return derived from equation 6. Some periods do not have a return that is statistically significant from an alternative period. The nonparametric empirical approach yields four T-values of 27.23 (p-value = .0001) or higher, indicating a significant difference in stock market returns across the six period classifications for all companies in the study. Table 2 presents a summary of the average rank value of stock market returns for each company across the six periods defined in this study. Assuming an alpha level of .05, the empirical results from equation 6 indicate all companies have four or more time-periods with stock market returns that are statistically different. The most interesting observation from Table 2 is the low relative return earned in the post-9/11 (period 4) era. Four of the five companies achieve their lowest return period in the post-Y2K or post-9/11 eras. The results imply companies in the same industry all tend to face financial challenges during the declining phase of a stock market bubble. The only company that deviates from the post-Y2K and post-9/11 negative trends is 3Com, which achieves their low return period in the Y2k era and achieves a high return period in the post-9/11 era. Although the relatively consistent negative return in the bubble bursting eras might seem obvious, it is
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Page 95 Academy of Accounting and Financial Studies Journal, Volume 15, Number 4, 2011 important to note all the companies in the study survived the stock market bubbles of the post- Y2K and post-9/11 eras. One of the limitations of the study is a potential survivor firm bias, where companies that did not survive the stock market bubble burst of the post-Y2K or post-9/11 eras are not part of the study. This limitation is somewhat mitigated by the observation that companies that did not survive almost certainly hit low periods in the post-Y2K or post-9/11 eras, which is consistent with our empirical results.
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