Information Externalities along the Supply Chain: The Economic Determinants of Suppliers' Stock Price Reaction to Their Customers' Earnings Announcements

• 成果类型: Article
• 署名作者: Pandit, Shail; Wasley, Charles E.; Zach, Tzachi
• 署名单位: University of Illinois System; University of Illinois Chicago; University of Illinois Chicago Hospital; University of Rochester; University System of Ohio; Ohio State University
• 刊物名称: CONTEMPORARY ACCOUNTING RESEARCH
• ISSN/ISSBN: 0823-9150
• DOI: 10.1111/j.1911-3846.2011.01092.x
• 发表日期: 2011
• 页码: 1304-+
• 关键词: management forecasts; horizontal mergers; empirical-analysis; capital-markets; transfers; contagion; WEALTH; returns; FIRMS

摘要

We study the economic determinants of the information externality suppliers experience at the time of their customers' earnings announcements. We measure the information externality as the suppliers' stock price reaction to the announcements. We find that the information externalities are increasing in the magnitude of the new information disclosed by customers; the strength of the economic bond between the firms; components of the customers' earnings information; the level of market uncertainty; and decreasing in suppliers' earnings persistence. Our results suggest that the information released in customers' earnings announcements leads to revisions in investors' beliefs about the level of suppliers' future earnings, as well as the uncertainty associated with these earnings. Our findings have implications for the voluntary disclosure literature. For example, future research might address the extent to which suppliers adopt and/or change voluntary disclosure practices to offset or complement the information contained in customers' information releases.