Earnings Attribution and Information Transfers

• 成果类型: Article
• 署名作者: Koo, David S.; Julie Wu, J.; Yeung, P. Eric
• 署名单位: University of Illinois System; University of Illinois Urbana-Champaign; University of Nebraska System; University of Nebraska Lincoln; Cornell University
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/1911-3846.12308
• 发表日期: 2017
• 页码: 1547-1579
• 关键词: management forecasts; horizontal mergers; empirical-analysis; industry shocks; returns; rivals; acquisitions; WEALTH; MARKET; entry

摘要

Managers frequently attribute the news in their earnings forecasts to various economic events. Using textual analysis, we identify the economic factors underlying earnings news from press releases. We document a wide range of industry-wide shocks and firm-specific actions to which the earnings news in management forecasts is attributed. As expected, earnings attributions significantly affect peer firms' price reactions to the earnings news. Specifically, earnings news attributed to industry-wide trends or firm structural changes leads to positive information transfers but earnings news attributed to firm competitive moves triggers negative information transfers. Information transfers are much stronger when each economic factor is mentioned the first time in a given industry-year. Further analysis reveals that the strength of information transfers varies with firm-level rivalry within the industry (i.e., similar business strategies, market position, and level of competition).