Priced in or punished: How macroeconomic regimes dictate if investors forgive goodwill impairments

Sammanfattning

This thesis investigates how macroeconomic regimes influence equity market reactions to goodwill impairment announcements. Utilizing an event study on a panel of S&P 500 companies from 2015 to 2025, the thesis analyzes abnormal stock returns to evaluate market efficiency and agency informational advantages. The findings reveal a lack of significant pre-announcement information leakage within the 30 day event window, suggesting that the announcement of impairment retains value relevant on the event day with an identification of a structural break in investor behavior surrounding the 2020 macroeconomic shift. During the pre-2020 economic expansion, the market forgave goodwill impairments. In contrast, the post-2020 environment has seen investors penalize these announcements as evidence of capital destruction. Lastly, this study demonstrates that market efficiency and investor tolerance for managerial failure are state dependent.