Arquivo de José Zorro Mendes - CEsA

José Zorro Mendes

The Value of Information: The Impact of European Union Banks Stress Tests on Stock Markets

The Value of Information: The Impact of European Union Bank Stress Tests on Stock Markets


In The Value of Information: The Impact of European Union Banks Stress Tests on Stock Markets we tested whether the 2010, 2011 and 2014 European Union bank stress tests produced useful and real information to the market. Using an augmented capital asset pricing model, we analyzed the impact of the information disclosures on each stress test (announcement, methodology and results events) on the stock market returns and risk of banks. Our approach allows an integrated analysis, as a sample of 41 banks that participated in all three stress tests was used. The most significant event was the methodology disclosure, in terms of its impact on risk and returns. In contrast, the results events did not have much impact in the stock market when considering the entire sample of banks. On the other hand, after dividing the sample of banks into two groups (those that passed the 2014 European Union stress test vs. those that failed), we observed a significant reaction of the stock markets in both groups. These findings are consistent with the hypothesis that stress tests provide real and valuable information to the markets about the banking system. A significant part of that information is conveyed by announcement and methodology events



“Borges, M. R., Mendes, J. Z. and Pereira, A. (2019). “The Value of Information: The Impact of European Union Banks Stress Tests on Stock Markets”. International Advances in Economic Research, 25, 429-444.

Digital music and the “death of the long tail"

Digital music and the “death of the long tail”


The new technology of digital distribution is changing the pop-rock music market. In the middle of the last decade Chris Anderson (Anderson, 2006) stated that the death of the CD and the dematerialization of music had created a long tail of marginal non-hits. The aggregate demand for these non-hits gave birth to important and valorized niches of pop-rock songs and memorabilia. This phenomenon has promoted the democratization of the access to cultural goods. But, growing evidence exists on the persistence of the so-called superstar effect. The impact of live music has renewed the relevance of highly extravagant outcomes for the privileged group of really great stars. The “winner takes all” effect dominates the music market, and streaming as a form of digital distribution fuels this effect. This new technology is posing several new issues to the development of the market and cultural policy. Our fundamental research questions then are: Is there empirical evidence of the long tail or superstar effect in the pop-rock music market? How did enterprises adapt their business strategies to this online technological revolution? Therefore, in Digital music and the “death of the long tail”, we examine different sources of data on the pop-rock market, such as the revenues from digital music sales and live music performances, to confirm the importance of the “winner takes all” effect and the persistence of important niches in alternative pop-rock music.



“Coelho, M., Mendes, Z. (2019). “Digital music and the “death of the long tail”. Journal of Business Research, 101, 454-460.

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