Industry Information Transfers: The Effect of Information Environment

18 Pages Posted: 2 Feb 2011

See all articles by Roger C. Graham

Roger C. Graham

Oregon State University

Raymond D. King

University of Oregon - Department of Accounting

Date Written: June 28, 2008

Abstract

This study extends the information environment theory of Atiase (1985) that suggests an inverse relation between the information available about a firm and the security price reaction to its release of earnings. Non-announcing firms' security price responses are found to be inversely related to their market value but directly related to the number of peer firm articles appearing in the Wall Street Journal and the historical earnings correlations within their industry. The results suggest that information environment affects the security price relevance of a firm's own and its peer firms' earnings.

Keywords: information environment, earnings information transfers

Suggested Citation

Graham, Roger C. and King, Raymond D., Industry Information Transfers: The Effect of Information Environment (June 28, 2008). Journal of Business Finance & Accounting, Vol. 23, Issue 9-10, pp. 1289-1306, 2008, Available at SSRN: https://ssrn.com/abstract=1753445 or http://dx.doi.org/10.1111/1468-5957.00080

Roger C. Graham (Contact Author)

Oregon State University ( email )

424 Austen Hall
Corvallis, OR 97331
United States
541-737-4028 (Phone)
541-737-4890 (Fax)

Raymond D. King

University of Oregon - Department of Accounting ( email )

Lundquist College of Business
1208 University of Oregon
Eugene, OR 97403
United States

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