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http://hdl.handle.net/10397/96101
Title: | Overreaction or underreaction to intra-industry earnings information transfer : a cross-country analysis | Authors: | Cheng, CSA Fang, J Huang, Y Zhong, Y |
Issue Date: | 2022 | Source: | Journal of international accounting research, 2022, v. 21, no. 1, p. 1-21 | Abstract: | We apply the moderated confidence hypothesis (MCH) to investigate overreaction and underreaction in intra-industry earnings information transfers in an international setting. MCH predicts that late announcing firms’ investors overreact (underreact) to early announcing industry peers’ earnings news when early announcing peers’ earnings news is imprecise (precise) signals of late announcing firms’ earnings. Consistent with this notion, we find that late announcing firms’ investors overreact to early announcing peers’ earnings news in a large sample of international firms. To the extent that the country-level information environment and culture share the precision of peers’ earnings as signals of each other’s earnings, we find that late announcing firms’ investors are more likely to underreact in countries with a richer information environment, are more likely to overreact in countries with higher individualism, and are less likely to overreact in countries with higher uncertainty avoidance. | Publisher: | International Accounting Section of the American Accounting Association | Journal: | Journal of international accounting research | EISSN: | 1542-6297 | DOI: | 10.2308/JIAR-2021-086 | Rights: | This is the accepted manuscript of the following article: C. S. Agnes Cheng, Jing Fang, Yuan Huang, Yuxiang Zhong; Overreaction or Underreaction to Intra-Industry Earnings Information Transfer: A Cross-Country Analysis. Journal of International Accounting Research 1 March 2022; 21 (1): 1–21, which has been published in final form at https://doi.org/10.2308/JIAR-2021-086. |
Appears in Collections: | Journal/Magazine Article |
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Overreactior_UnderreactiIntra-Industry_Earnings.pdf | Pre-Published version | 903.09 kB | Adobe PDF | View/Open |
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