Due to the abolition of two important legal restrictions
(Rabattgesetz and Zugabeverordnung) in August 2001 the
marketing instrument of price promotions is much more
widely applied in the German car retail market than only
some years ago. We explore the impact of automobile
price promotions on shareholder value. As an indicator
for shareholder value, stock market performance of eight
European car manufacturers is tested for abnormal
returns due to the announcement of price promotions in
the German car market within the period of 2001 to 2004.
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