Inter-industry network structure and the cross-predictability of earnings and stock returns

• 成果类型: Article
• 署名作者: Aobdia, Daniel; Caskey, Judson; Ozel, N. Bugra
• 署名单位: Northwestern University; University of Texas System; University of Texas Austin; University of California System; University of California Los Angeles
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-014-9286-7
• 发表日期: 2014
• 页码: 1191-1224
• 关键词: aggregate market reaction; information-content; industries; guidance; analysts; origins; firm

摘要

We examine how the patterns of inter-industry trade flows impact the transfer of information and economic shocks. We provide evidence that the intensity of transfers depends on industries' positions within the economy. In particular, some industries occupy central positions in the flow of trade, serving as hubs. Consistent with a diversification effect, we find that these industries' returns depend relatively more on aggregate risks than do returns of noncentral industries. Analogously, we find that the accounting performance of central industries associates more strongly with macroeconomic measures than does the accounting performance of noncentral industries. Comparing central industries to noncentral ones, we find that the stock returns and accounting performance of central industries better predict the performance of industries linked to them. This suggests that shocks to central industries propagate more strongly than shocks to other industries. Our results highlight how industries' positions within the economy affect the transfer of information and economic shocks.