Asymmetric Reporting Timeliness and Informational Feedback

• 成果类型: Article
• 署名作者: Chen, Qi; Huang, Zeqiong; Jiang, Xu; Zhang, Gaoqing; Zhang, Yun
• 署名单位: Duke University; Tsinghua University; Yale University; University of Minnesota System; University of Minnesota Twin Cities; George Washington University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2020.3734
• 发表日期: 2021
• 页码: 5194-5208
• 关键词: timely loss recognition; Price informativeness; Feedback effect

摘要

We examine the effects of asymmetric timeliness in reporting good versus bad news on price informativeness when prices provide useful information to assist firms' investment decisions. We find that a reporting system featuring more timely disclosure of bad news than of good news encourages speculators to trade on their private information. Consequently, it generates a higher expected investment level and firm value. Our analysis generates predictions consistent with empirical findings and provides a justification for the more timely reporting of bad news in the absence of managerial incentive problems.