Do baths muddy the waters or clear the air?

• 成果类型: Article
• 署名作者: Haggard, K. Stephen; Howe, John S.; Lynch, Andrew A.
• 署名单位: Missouri State University; University of Missouri System; University of Missouri Columbia; State University of New York (SUNY) System; Binghamton University, SUNY
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2014.09.007
• 发表日期: 2015
• 关键词: BID-ASK SPREAD; earnings management; stock returns; INFORMATION; income; liquidity; incentives; volatility; components; DISCRETION

摘要

We examine the information environments of firms following large, non-recurring charges (baths). We test competing hypotheses about the consequences of a bath a bath either improves the information environment (the transparency hypothesis) or degrades it (the opacity hypothesis). Difference-in-differences analysis suggests that after a bath (I) earnings become smoother, (2) firm-level information asymmetry decreases, and (3) stock returns become more responsive to unexpected earnings. We interpret these findings as supportive of the transparency hypothesis. We also document that the relative improvement in the information environment is greater for baths that are not voluntary, consistent with managerial obfuscation prior to the bath. (C) 2014 Elsevier B.V. All rights reserved.