Relative performance evaluation and the timing of earnings release

• 成果类型: Article
• 署名作者: Gong, Guojin; Li, Laura Yue; Yin, Huifang
• 署名单位: Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park; University of Illinois System; University of Illinois Urbana-Champaign; Shanghai University of Finance & Economics
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2019.03.002
• 发表日期: 2019
• 关键词: timeliness; news; tournaments; COMPETITION; management; income; FIRMS

摘要

Relative performance evaluation (RPE) compensates managers on their relative performance against a peer group. Since observing more peers' performance allows managers to better estimate the performance level required to achieve RPE targets, we conjecture that releasing earnings later than peers facilitates managers to achieve targets by exploiting last-minute reporting discretion. Empirical evidence is consistent with our conjecture. Further, managers tend to select peers that release earnings more timely and delay own firms' earnings releases to be later than peers' after RPE adoption. Our evidence suggests strategic timing of earnings release and discretionary reporting in response to relative performance evaluation. (C) 2019 Elsevier B.V. All rights reserved.