Abstract

http://ssrn.com/abstract=1711733
 
 

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Earnings Attribution and Information Transfers


David S. Koo


University of Illinois at Urbana-Champaign

Juan (Julie) Wu


University of Georgia

P. Eric Yeung


Cornell University - Samuel Curtis Johnson Graduate School of Management

January 7, 2014


Abstract:     
Management frequently attributes earnings news to various economic events. Using textual analysis, we identify the economic factors underlying earnings news from press releases. We document a wide range of industry-wide shocks and firm-specific actions to which the earnings news in management forecasts is attributed. As expected, earnings attributions significantly affect peer firms’ price reactions to the earnings news. Specifically, earnings news attributed to industry-wide trends or firm structural changes leads to positive information transfers but news attributed to firm competitive moves triggers negative information transfers. Further evidence reveals that the strength of information transfers varies with firm-level rivalry within the industry, the nature of industry-level rivalry, and the credibility of earnings attributions.

Number of Pages in PDF File: 48

Keywords: Earnings Attributions, Information Transfers, Management Forecasts, Textual Analysis

JEL Classification: G14, M41

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Date posted: November 20, 2010 ; Last revised: April 9, 2014

Suggested Citation

Koo, David S. and Wu, Juan (Julie) and Yeung, P. Eric, Earnings Attribution and Information Transfers (January 7, 2014). Available at SSRN: http://ssrn.com/abstract=1711733 or http://dx.doi.org/10.2139/ssrn.1711733

Contact Information

David S. Koo
University of Illinois at Urbana-Champaign ( email )
1206 South Sixth Street
Champaign, IL 61820
United States
Juan (Julie) Wu
University of Georgia ( email )
Dept. of Finance, Terry College of Business
University of Georgia
Athens, GA 30602-6254
United States
HOME PAGE: http://www.terry.uga.edu/directory/profile/juliewu/
P. Eric Yeung (Contact Author)
Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )
Ithaca, NY 14853
United States
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