Competing earnings announcements which announcement do investors process first? James R. Frederickson & Leon Zolotoy

Por: Colaborador(es): Tipo de material: ArtículoArtículoDescripción: Páginas 441 a la 462Tema(s): En: The accounting review 2016 V.91 No. 2 (Mar)Incluye tablas, figuras y referencias bibliográficasResumen: Consistent with investors having limited attention, we posit that when faced with competing earnings announcements, investors behave as if they queue the announcements based on a firm or earnings announcement attribute. We focus on two potential queuing attributes: (1) firm visibility, and (2) the expected cost of processing the earnings announcements. We find no support for queuing based on the latter, but find a statistically significant and economically meaningful queuing effect based on firm visibility. Earnings announcements made by firms that are more visible than a given firm—but not by firms that are less visible—mitigate the announcement window market response to that firm's unexpected earnings, with a corresponding magnification in its post-earnings announcement drift. Further, the effects of visibility-based queuing are more pronounced for days with greater clustering of earnings announcements. Additional analysis suggests that individual investors—not institutional investors—drive the queuing effect.
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Revistas Central Bogotá Sala Hemeroteca Colección Hemeroteca 657 (Navegar estantería(Abre debajo)) 2016 V.91 No. 2 (Mar) 1 Disponible 0000002031463

Consistent with investors having limited attention, we posit that when faced with competing earnings announcements, investors behave as if they queue the announcements based on a firm or earnings announcement attribute. We focus on two potential queuing attributes: (1) firm visibility, and (2) the expected cost of processing the earnings announcements. We find no support for queuing based on the latter, but find a statistically significant and economically meaningful queuing effect based on firm visibility. Earnings announcements made by firms that are more visible than a given firm—but not by firms that are less visible—mitigate the announcement window market response to that firm's unexpected earnings, with a corresponding magnification in its post-earnings announcement drift. Further, the effects of visibility-based queuing are more pronounced for days with greater clustering of earnings announcements. Additional analysis suggests that individual investors—not institutional investors—drive the queuing effect.

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