Investor protection and price informativeness about future earnings: international evidence

• 成果类型: Article
• 署名作者: Haw, In-Mu; Hu, Bingbing; Lee, Jay Junghun; Wu, Woody
• 署名单位: Texas Christian University; Hong Kong Baptist University; Chinese University of Hong Kong
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-012-9181-z
• 发表日期: 2012
• 页码: 389-419
• 关键词: reporting incentives; corporate governance; accounting standards; VALUE RELEVANCE; STOCK; management; LEGAL; disclosure; analysts; accruals

摘要

This study draws on the investor protection literature to identify structural factors in a country's information environment that are likely to explain cross-country differences in the extent to which future earnings information is capitalized in current stock returns. Using a sample of 55,900 firm-years from 32 countries, we find that greater financial disclosure, higher quality earnings, and greater information dissemination through news media are associated with stock prices that are more informative about future earnings, whereas strong enforcement of insider trading laws is associated with stock prices that are less informative about future earnings. We also find that, on average, price informativeness about future earnings is greater in countries with strong investor protection. Our results illuminate the importance of structural factors constituting a country's information environment in explaining cross-country variation in price informativeness about future earnings.