{"id":41097,"date":"2025-11-14T08:00:00","date_gmt":"2025-11-14T00:00:00","guid":{"rendered":"https:\/\/www.tejwin.com\/?post_type=insight&#038;p=41097"},"modified":"2025-11-26T13:32:13","modified_gmt":"2025-11-26T05:32:13","slug":"tcri-watchdog-part2","status":"publish","type":"insight","link":"https:\/\/www.tejwin.com\/en\/insight\/tcri-watchdog-part2\/","title":{"rendered":"TCRI Watchdog Part2\uff1aHow Different Types of Corporate Events Shape Market Reactions"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/www.tejwin.com\/wp-content\/uploads\/TCRI-Watchdog-Part2-1024x576.png\" alt=\"\" class=\"wp-image-41117\" srcset=\"https:\/\/www.tejwin.com\/wp-content\/uploads\/TCRI-Watchdog-Part2-1024x576.png 1024w, https:\/\/www.tejwin.com\/wp-content\/uploads\/TCRI-Watchdog-Part2-300x169.png 300w, https:\/\/www.tejwin.com\/wp-content\/uploads\/TCRI-Watchdog-Part2-150x84.png 150w, https:\/\/www.tejwin.com\/wp-content\/uploads\/TCRI-Watchdog-Part2-768x432.png 768w, https:\/\/www.tejwin.com\/wp-content\/uploads\/TCRI-Watchdog-Part2-1536x864.png 1536w, https:\/\/www.tejwin.com\/wp-content\/uploads\/TCRI-Watchdog-Part2.png 1920w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69ebc11d1d46d\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"ez-toc-cssicon\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69ebc11d1d46d\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.tejwin.com\/en\/insight\/tcri-watchdog-part2\/#Introduction%EF%BC%9AFrom_Information_Disclosure_to_Market_Behavior\" >Introduction\uff1aFrom Information Disclosure to Market Behavior<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.tejwin.com\/en\/insight\/tcri-watchdog-part2\/#Behavioral_Characteristics_Across_Event_Categories\" >Behavioral Characteristics Across Event Categories&nbsp;&nbsp;&nbsp;<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.tejwin.com\/en\/insight\/tcri-watchdog-part2\/#Key_Insights_by_Category\" >Key Insights by Category&nbsp;<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.tejwin.com\/en\/insight\/tcri-watchdog-part2\/#A_Accounting_Financial_Reporting\" >A. Accounting &amp; Financial Reporting<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.tejwin.com\/en\/insight\/tcri-watchdog-part2\/#IIndustry_Prospects\" >I.Industry Prospects<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.tejwin.com\/en\/insight\/tcri-watchdog-part2\/#M_Corporate_Governance_Management\" >M. Corporate Governance &amp; Management&nbsp;<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.tejwin.com\/en\/insight\/tcri-watchdog-part2\/#F_Market_Transactions\" >F. Market Transactions<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.tejwin.com\/en\/insight\/tcri-watchdog-part2\/#Interpretation_for_I_type_events\" >Interpretation for I type&nbsp;events<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.tejwin.com\/en\/insight\/tcri-watchdog-part2\/#Interpretation_for_R_type_events\" >Interpretation for R type&nbsp;events<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.tejwin.com\/en\/insight\/tcri-watchdog-part2\/#Conclusion_Turning_Events_into_Quantifiable_Market_Signals\" >Conclusion: Turning Events into Quantifiable Market Signals&nbsp;<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Introduction%EF%BC%9AFrom_Information_Disclosure_to_Market_Behavior\"><\/span>Introduction\uff1aFrom Information Disclosure to Market Behavior<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In<a href=\"https:\/\/www.tejwin.com\/en\/insight\/tcri-watchdog-part-1\/\" data-type=\"link\" data-id=\"https:\/\/www.tejwin.com\/en\/insight\/tcri-watchdog-part-1\/\"> <\/a><strong><a href=\"https:\/\/www.tejwin.com\/en\/insight\/tcri-watchdog-part-1\/\" data-type=\"link\" data-id=\"https:\/\/www.tejwin.com\/en\/insight\/tcri-watchdog-part-1\/\">TCRI Watchdog Part 1: How Major Announcements Drive Stock Price Volatility<\/a>,<\/strong> we demonstrated that Taiwan\u2019s equity market exhibits a clear and asymmetric reaction to corporate announcements: <strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-luminous-vivid-orange-color\">negative events lead to stronger and more persistent price declines, and much of this movement occurs even before the information is officially disclosed.<\/mark><\/strong> Using TCRI Watchdog\u2019s Event Intensity framework, we quantified how different levels of negative and positive signals translate into abnormal returns, revealing the market\u2019s behavioral patterns across the event window.<\/p>\n\n\n\n<p>Building on these findings, Part 2 examines whether all types of announcements generate the same level of market impact\u2014or whether certain categories carry far greater influence.TCRI Watchdog classifies all events into 5 major categories: <strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-luminous-vivid-orange-color\">Accounting, Industry Prospects, Management &amp; Governance, Market Transactions, and Crisis Events<\/mark><\/strong>. Each category reflects a different dimension of corporate fundamentals or risk, and the market reacts to them in meaningfully different ways.<\/p>\n\n\n\n<p>In the following sections, we analyze how each category affects stock prices, compare their reaction magnitudes and persistence, and highlight which types of information serve as the most important early-warning signals for investors.<\/p>\n\n\n\n<p class=\"has-background has-medium-font-size\" style=\"background-color:#ffe9ae\"><em><strong>\u27a1\ufe0f <a href=\"https:\/\/www.tejwin.com\/en\/news\/tcri-watchdog\/\" data-type=\"link\" data-id=\"https:\/\/www.tejwin.com\/en\/insight\/tej-point-in-time-audited-financial-database\/\">Part1:&nbsp;How Major Announcements Drive Stock Price Volatility<\/a><\/strong><\/em><\/p>\n\n\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"block-9754109c-8d80-4751-bb26-fb417138bdbd\"><span class=\"ez-toc-section\" id=\"Behavioral_Characteristics_Across_Event_Categories\"><\/span><strong>Behavioral Characteristics Across Event Categories<\/strong>&nbsp;&nbsp;&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>To further understand how markets differentiate between event types, the five TCRI WD types were compared, the analysis of event quantity and event score is shown in Figure 1:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>I \u2013 Industry Prospects\uff1a<br><\/strong>This category contains the largest number of events (29,281 records), with the majority clustered at a score of 0 (70.0%), indicating that most industry-related disclosures are neutral in nature.&nbsp;&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>A \u2013 Accounting \/ Financial Reporting\uff1a&nbsp;<br><\/strong>Among the 1,015 events in this category, \u20131 scores account for 45.0%, reflecting a relatively high proportion of mildly negative information in financial disclosures or reporting adjustments.&nbsp;<br><br><\/li>\n\n\n\n<li><strong>F \u2013 Market Transactions and M \u2013 Management \/ Governance\uff1a<br><\/strong>Events in these categories also tend to fall under \u20131 or 0, suggesting that they are generally mildly negative or neutral.&nbsp;&nbsp;<br><br><\/li>\n\n\n\n<li><strong>R \u2013 Crisis Events\uff1a&nbsp;<br><\/strong>The 501 events in this category are heavily concentrated in the \u20132 and \u20133 groups, highlighting their association with severe negative developments.&nbsp;<\/li>\n<\/ul>\n\n\n\n<p><\/p>\n\n\n\n<p><strong>Figure 1\uff1aEvent Distribution Chart<\/strong>&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"981\" src=\"https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-3-1024x981.png\" alt=\"\" class=\"wp-image-41100\" srcset=\"https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-3-1024x981.png 1024w, https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-3-300x287.png 300w, https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-3-150x144.png 150w, https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-3-768x736.png 768w, https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-3-1536x1471.png 1536w, https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-3-2048x1962.png 2048w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p>&nbsp;<strong>Figure 2<\/strong>\uff1a<strong>CAAR (T+10) Group Comparison Chart<\/strong>&nbsp;<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img decoding=\"async\" width=\"1024\" height=\"944\" src=\"https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-4-1024x944.png\" alt=\"\" class=\"wp-image-41102\" srcset=\"https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-4-1024x944.png 1024w, https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-4-300x277.png 300w, https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-4-150x138.png 150w, https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-4-768x708.png 768w, https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-4-1536x1416.png 1536w, https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-4-2048x1888.png 2048w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\"><em>Group: Divided into 9 score types based on event intensity score; <\/em><br><em>Dimension: Divided into 5 major event categories<\/em><\/figcaption><\/figure>\n\n\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<p class=\"has-background has-medium-font-size\" style=\"background-color:#ffe9ae\">\ud83d\udc49 <strong><a href=\"https:\/\/www.tejwin.com\/en\/contact\/\" data-type=\"link\" data-id=\"https:\/\/www.tejwin.com\/en\/contact\/\"><em><strong>Meet TEJ at <\/strong>New York Winter Data Summit 2025<\/em><\/a><\/strong><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Insights_by_Category\"><\/span>Key Insights by Category&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"A_Accounting_Financial_Reporting\"><\/span><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-luminous-vivid-orange-color\"><strong>A. Accounting &amp; Financial Reporting<\/strong><\/mark><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>This category primarily includes events\u202fsuch as financial statement delays, changes in auditor policies, and financial restatements or revisions. Overall, <strong>the market\u2019s interpretation of these events is distinctly negative<\/strong>. Within the negative group, market reactions exhibit a clear \u201cmonotonic decline\u201d: the CAAR decreases from \u20132.17% in the \u20131 group to \u20137.07% in the \u20133 group, although the \u20133 result is not statistically significant. <\/p>\n\n\n\n<p>In contrast, the positive group records only a mild rebound of +0.53%\u2014a result that is also statistically insignificant\u2014indicating that any potential favorable impact is very limited.\u00a0<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"IIndustry_Prospects\"><\/span><strong><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-luminous-vivid-orange-color\">I.Industry Prospects<\/mark><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>Industry-related announcements represent the <strong>largest event category<\/strong> among the five, covering operations, production, R&amp;D progress, workforce adjustments, capital raising, and regulatory compliance. Events in this category exhibit the <strong>most substantial and persistent market reactions<\/strong>.&nbsp;<\/p>\n\n\n\n<p>For example, <strong>\u20133 intensity events show a striking CAAR of \u201319.42%<\/strong>, indicating that when industry outlook deteriorates or operational momentum weakens, investors respond with <strong>collective risk-averse behavior<\/strong>.&nbsp;<\/p>\n\n\n\n<p>In contrast, positive events have relatively limited upward impact\u2014<strong>+2 events show a CAAR of only about +2.27%<\/strong>, reflecting the market\u2019s more moderate response to favorable information.&nbsp;<\/p>\n\n\n\n<p>Overall, <strong>Industry Prospect events<\/strong> best reflect shifts in market sentiment, displaying characteristics of <strong>high volatility and strong persistence<\/strong>. <\/p>\n\n\n\n<p><strong>Table 1<\/strong>\uff1a<strong>Detailed Statistical Results of I type events<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table class=\"has-background has-fixed-layout\" style=\"background-color:#ffe9ae\"><thead><tr><th class=\"has-text-align-center\" data-align=\"center\">Group&nbsp;<\/th><th class=\"has-text-align-right\" data-align=\"right\">Event Count&nbsp;<\/th><th class=\"has-text-align-right\" data-align=\"right\">Mean AAR (%)&nbsp;<\/th><th class=\"has-text-align-right\" data-align=\"right\">Final CAAR (%)&nbsp;<\/th><th class=\"has-text-align-right\" data-align=\"right\"><strong>Significance&nbsp;<\/strong><\/th><\/tr><\/thead><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\">-1&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">4696&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">-0.09%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">-1.81%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">***&nbsp;<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">-2&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">506&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">-0.11%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">-2.40%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">***&nbsp;<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">-3&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">45&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">-0.91%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">-19.42%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">***&nbsp;<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">1&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">3511&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">0.06%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">1.26%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">***&nbsp;<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">2&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">18&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">0.11%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">2.27%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">&nbsp;<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">negative&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">5247&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">-0.12%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">-2.45%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">***&nbsp;<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">neutral&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">20505&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">-0.00%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">0.00%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">&nbsp;<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">positive&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">3529&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">0.06%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">1.27%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">***&nbsp;<\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\"><em>Statistical significance indicators\uff1a*, **, and *** denote significance at the 10% (\u03b1 = 0.10), 5% (\u03b1 = 0.05), and 1% (\u03b1 = 0.01) levels, respectively.<\/em><br><\/figcaption><\/figure>\n\n\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"M_Corporate_Governance_Management\"><\/span><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-luminous-vivid-orange-color\"><strong>M. Corporate Governance &amp; Management<\/strong>&nbsp;<\/mark><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>This category primarily includes events\u202fsuch as senior management changes, shifts in control rights, internal-control deficiencies, and social controversies.<strong> Category M generates the strongest positive market reaction among all event types<\/strong>. The positive group exhibits a CAAR of +4.51%, the highest across all categories. Even the neutral group shows a meaningful positive return of +1.89%, suggesting that <strong>investors generally view M-type events as opportunities for operational improvement or governance enhancement<\/strong>.<\/p>\n\n\n\n<p>Although the negative group shows a moderate decline of \u20131.52%, the overall pattern remains predominantly positive. Notably, the \u20133 group registers a significant drop of \u20138.65%, yet this does not overturn the broader tendency for M-type events to elicit net favorable market responses.\u00a0<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"F_Market_Transactions\"><\/span><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-luminous-vivid-orange-color\"><strong>F. Market Transactions<\/strong><\/mark><span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p>This category primarily includes events\u202fsuch as rating changes, abnormal price volatility, and insider trading\u2013related issues. <strong>Market reactions to these events are more mixed and lack a clear directional pattern<\/strong>. Interestingly, the neutral group\u2019s CAAR (+1.09%) exceeds that of the positive group (+0.32%), suggesting that investors do not share a consistent expectation regarding F-type events. Within the negative group, the total CAAR is \u20132.42%, indicating only a mild adverse response. Although the \u20132 group shows a sharp decline of \u20139.89%, the small sample size (N = 11) limits its interpretability. <\/p>\n\n\n\n<p>Overall, none of the CAAR results across F-type subgroups are statistically significant, indicating that the market impact of these events is generally weak and inconsistent.\u00a0<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-luminous-vivid-orange-color\"><strong>R. Crisis Precursor<\/strong><\/mark><\/p>\n\n\n\n<p>Crisis-related events involve TCRI downgrade, defaults, delistings, financial restructuring, and penalties imposed by regulatory authorities. This category is the most <strong>directly tied to credit risk<\/strong> within the TCRI Watchdog .&nbsp;<\/p>\n\n\n\n<p>The market reaction to R-type events is both <strong>severe and highly persistent<\/strong>.&nbsp;Events in the <strong>\u20132 group show a CAAR of \u20135.87%<\/strong>, and the <strong>\u20133 group declines significantly further to \u201310.36%<\/strong>. Moreover, the downward trend continues <strong>from t+6 to t+9<\/strong>, showing a clear <strong>post-event drift effect<\/strong>.&nbsp;<\/p>\n\n\n\n<p>These results underscore that crisis-related disclosures serve as <strong>early warning indicators of deteriorating credit quality<\/strong>, making them especially valuable for credit risk monitoring and bond investment strategies.&nbsp;<\/p>\n\n\n\n<p><strong>Table 2<\/strong>\uff1a<strong>Detailed Statistical Results of R type events<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-table is-style-stripes\"><table class=\"has-background has-fixed-layout\" style=\"background-color:#ffe9ae\"><thead><tr><th class=\"has-text-align-center\" data-align=\"center\">Group&nbsp;<\/th><th class=\"has-text-align-right\" data-align=\"right\">Event Count&nbsp;<\/th><th class=\"has-text-align-right\" data-align=\"right\">Mean AAR (%)&nbsp;<\/th><th class=\"has-text-align-right\" data-align=\"right\">Final CAAR (%)&nbsp;<\/th><th class=\"has-text-align-right\" data-align=\"right\"><strong>Significance&nbsp;<\/strong><\/th><\/tr><\/thead><tbody><tr><td class=\"has-text-align-center\" data-align=\"center\">-2&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">328&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">-0.27%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">-5.87%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">***<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">-3&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">173&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">-0.47%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">-10.36%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">***<\/td><\/tr><tr><td class=\"has-text-align-center\" data-align=\"center\">negative&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">501&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">-0.34%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">-7.44%&nbsp;<\/td><td class=\"has-text-align-right\" data-align=\"right\">***<\/td><\/tr><\/tbody><\/table><figcaption class=\"wp-element-caption\"><em>Statistical significance indicators\uff1a*, **, and *** denote significance at the 10% (\u03b1 = 0.10), 5% (\u03b1 = 0.05), and 1% (\u03b1 = 0.01) levels, respectively.<\/em><br><\/figcaption><\/figure>\n\n\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Interpretation_for_I_type_events\"><\/span>Interpretation for I type&nbsp;events<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>Event Impact (AAR):<\/strong>&nbsp;<\/p>\n\n\n\n<p>From the top-left AAR chart and the AR t-statistic panel, the announcement day (t=0) shows a clear pattern: the stronger the negative intensity (\u20131, \u20132, \u20133), the larger the abnormal drop in stock prices. The \u20133 group (dark blue line) experiences the steepest one-day decline, indicating the most severe market reaction.&nbsp;<\/p>\n\n\n\n<p><strong>Cumulative Effect (CAR):<\/strong>&nbsp;<\/p>\n\n\n\n<p>The top-right CAR chart illustrates a pronounced post-event drift for negative events. The \u20133 group continues to fall after t=0, ultimately reaching nearly \u201320% by day t+10, while the \u20132 and \u20131 groups show much milder declines.&nbsp;<\/p>\n\n\n\n<p><strong>Statistical Significance:<\/strong>&nbsp;<\/p>\n\n\n\n<p>The CAR t-statistic panel confirms that these declines are not random. The \u20131, \u20132, and \u20133 groups remain below the \u20132 t-value threshold after the announcement, indicating strong statistical significance.&nbsp;<\/p>\n\n\n\n<p><strong>Asymmetry:<\/strong>&nbsp;<\/p>\n\n\n\n<p>In contrast, positive events (pink line) exhibit a brief increase around the announcement window, but their cumulative gains quickly level off\u2014far weaker and much less persistent than the impact of negative events.&nbsp;<\/p>\n\n\n\n<p><strong>Figure 3<\/strong>\uff1a<strong>Group Comparison Chart of I type events<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"990\" src=\"https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-5-1024x990.png\" alt=\"\" class=\"wp-image-41106\" srcset=\"https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-5-1024x990.png 1024w, https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-5-300x290.png 300w, https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-5-150x145.png 150w, https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-5-768x743.png 768w, https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-5-1536x1485.png 1536w, https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-5-2048x1980.png 2048w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Interpretation_for_R_type_events\"><\/span><strong>Interpretation for R type&nbsp;events<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p><strong>Pre-Event Drift:<\/strong>&nbsp;<\/p>\n\n\n\n<p>The CAR chart (top-right) shows that all negative groups (negative, \u20132, \u20133) begin declining roughly <strong>three days before t=0<\/strong>, indicating that the market had already started pricing in the information ahead of the announcement.&nbsp;<\/p>\n\n\n\n<p><strong>Post-Event Declines (AAR):<\/strong>&nbsp;<\/p>\n\n\n\n<p>The AAR chart (top-left) indicates that the <strong>\u20133 group (dark blue)<\/strong> experiences sharper abnormal daily losses than the <strong>\u20132 group (blue)<\/strong> during <strong>t=0 to t+6<\/strong>, reflecting stronger negative sentiment.&nbsp;<\/p>\n\n\n\n<p><strong>Cumulative Effect (CAR):<\/strong>&nbsp;<\/p>\n\n\n\n<p>The \u20133 group shows the deepest cumulative decline, reaching about <strong>\u201310%<\/strong>, followed by the \u20132 group at around <strong>\u20136%<\/strong>, confirming the positive relationship between negative intensity and the magnitude of price drops.&nbsp;<\/p>\n\n\n\n<p><strong>Different Drift Patterns:<\/strong>&nbsp;<\/p>\n\n\n\n<p>Although the \u20133 group falls more sharply, it <strong>bottoms out around t+5<\/strong>. In contrast, the \u20132 group declines more slowly but exhibits a <strong>longer-lasting post-event drift<\/strong>, continuing downward through <strong>t+10<\/strong>.&nbsp;<\/p>\n\n\n\n<p><strong>Statistical Significance:<\/strong>&nbsp;<\/p>\n\n\n\n<p>The CAR t-statistic chart confirms that these declines are highly significant. All negative groups remain <strong>below \u20133 in t-values<\/strong> after the event, indicating that the negative effects are statistically robust rather than random fluctuations.&nbsp;<\/p>\n\n\n\n<p><strong>Figure 4\uff1aGroup Comparison Chart of R type events<\/strong><\/p>\n\n\n\n<figure class=\"wp-block-image size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"992\" src=\"https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-6-1024x992.png\" alt=\"\" class=\"wp-image-41108\" style=\"width:778px;height:auto\" srcset=\"https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-6-1024x992.png 1024w, https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-6-300x291.png 300w, https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-6-150x145.png 150w, https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-6-768x744.png 768w, https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-6-1536x1487.png 1536w, https:\/\/www.tejwin.com\/wp-content\/uploads\/2511_WD_4-6-2048x1983.png 2048w\" sizes=\"(max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"1\" height=\"1\" src=\"https:\/\/www.tejwin.com\/wp-content\/uploads\/image-718.png\" alt=\"\" class=\"wp-image-41110\"\/><\/figure>\n\n\n\n<p>Overall, <strong>Industry Prospects (I)<\/strong> and <strong>Crisis Precursors (R)<\/strong> are the two event categories that elicit the strongest market reactions. The former reflects shocks to a company\u2019s operating fundamentals, while the latter signals rising credit risk. These differences not only highlight the market\u2019s layered response to different types of risk, but also demonstrate how the TCRI Watchdog classification framework accurately captures real market behavior.&nbsp;<\/p>\n\n\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"block-4b5de2c8-3387-4286-8175-557e2ae137ee\"><span class=\"ez-toc-section\" id=\"Conclusion_Turning_Events_into_Quantifiable_Market_Signals\"><\/span><strong>Conclusion: Turning Events into Quantifiable Market Signals<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p id=\"block-a3601df1-9911-4478-a3ff-d220f358d892\">This study shows that Taiwan\u2019s market reacts <strong>quickly yet asymmetrically<\/strong> to corporate announcements. <strong>Negative information dominates<\/strong>, with impacts that begin before disclosure and persist afterward as downward drifts.<\/p>\n\n\n\n<p id=\"block-a3601df1-9911-4478-a3ff-d220f358d892\">Among the five event types,<strong> Industry Prospects (I) had the most significant and lasting effects\u2014<\/strong>extreme negative events (\u20133) led to an average cumulative drop of \u201319.4%, sustained through ten trading days.<strong> Crisis events (R) most closely reflected early credit deterioration<\/strong>, with extended tail risks.&nbsp;<\/p>\n\n\n\n<p>The findings highlight a key insight:&nbsp;&nbsp;<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-luminous-vivid-orange-color\"><strong>The market reacts not only to the event itself, but to the nature and risk level of that event.<\/strong>&nbsp;<\/mark><\/p>\n\n\n\n<p>For investors, this provides a new behavioral lens\u2014<strong>quantitatively tracking how markets price information before and after disclosures, rather than reviewing events retrospectively.&nbsp;<\/strong><\/p>\n\n\n\n<p>Whether constructing short-term trading models, long-term risk indicators, or portfolio surveillance systems, <strong>TCRI Watchdog\u2019s event intensity data forms the essential behavioral layer linking information flow with market response.&nbsp;<\/strong><\/p>\n\n\n\n<p class=\"has-background has-medium-font-size\" style=\"background-color:#ffe9ae\"><strong><em>\ud83d\udc49 <a href=\"https:\/\/www.tejwin.com\/en\/contact\/\" data-type=\"link\" data-id=\"https:\/\/www.tejwin.com\/en\/contact\/\">Get trial for Taiwan alternative data<\/a><\/em><\/strong><\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-wp-embed is-provider-tej wp-block-embed-tej\"><div class=\"wp-block-embed__wrapper\">\n<blockquote class=\"wp-embedded-content\" data-secret=\"6aciCk0eyg\"><a href=\"https:\/\/www.tejwin.com\/en\/news\/tcri-watchdog\/\">TCRI\u2122 Watchdog<\/a><\/blockquote><iframe class=\"wp-embedded-content\" sandbox=\"allow-scripts\" security=\"restricted\" style=\"position: absolute; visibility: hidden;\" title=\"TCRI\u2122 Watchdog &#8212; TEJ\" src=\"https:\/\/www.tejwin.com\/en\/news\/tcri-watchdog\/embed\/#?secret=pTJ1TGwXFF#?secret=6aciCk0eyg\" data-secret=\"6aciCk0eyg\" width=\"600\" height=\"338\" frameborder=\"0\" marginwidth=\"0\" marginheight=\"0\" scrolling=\"no\"><\/iframe>\n<\/div><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>TCRI Watchdog classifies all events into 5 major categories: Accounting, Industry Prospects, Management &#038; Governance, Market Transactions, and Crisis Events. We analyze how each category affects stock prices, compare their reaction magnitudes and persistence, and highlight which types of information serve as the most important early-warning signals for investors.<\/p>\n","protected":false},"featured_media":41117,"template":"","tags":[3264,3536,3505,3476],"insight-category":[690],"class_list":["post-41097","insight","type-insight","status-publish","has-post-thumbnail","hentry","tag-alternative-data","tag-eventstudy","tag-point-in-time-2","tag-tcri-watchdog","insight-category-data-analysis"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.tejwin.com\/en\/wp-json\/wp\/v2\/insight\/41097","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.tejwin.com\/en\/wp-json\/wp\/v2\/insight"}],"about":[{"href":"https:\/\/www.tejwin.com\/en\/wp-json\/wp\/v2\/types\/insight"}],"version-history":[{"count":17,"href":"https:\/\/www.tejwin.com\/en\/wp-json\/wp\/v2\/insight\/41097\/revisions"}],"predecessor-version":[{"id":41583,"href":"https:\/\/www.tejwin.com\/en\/wp-json\/wp\/v2\/insight\/41097\/revisions\/41583"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.tejwin.com\/en\/wp-json\/wp\/v2\/media\/41117"}],"wp:attachment":[{"href":"https:\/\/www.tejwin.com\/en\/wp-json\/wp\/v2\/media?parent=41097"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.tejwin.com\/en\/wp-json\/wp\/v2\/tags?post=41097"},{"taxonomy":"insight-category","embeddable":true,"href":"https:\/\/www.tejwin.com\/en\/wp-json\/wp\/v2\/insight-category?post=41097"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}