Corporate Governance and the Timing of Earnings Announcements
Review of Finance, 2014, 18(6), 2003-2044
54 Pages Posted: 15 Mar 2011 Last revised: 20 Jun 2015
Date Written: October 30, 2013
Using comprehensive timestamp data on earnings announcements collected from newswires, we show that earnings news announced within trading hours results in approximately 50% smaller immediate reaction compared to similar earnings announced outside trading hours. Negative news tends to be announced during trading hours, which, together with the reduced response, may allow for managerial opportunistic behavior. We also provide evidence that announcement timing is affected by internal corporate governance. Recent regulations that tightened firms’ governance are associated with a significant shift to announcing outside trading hours, especially for firms with better corporate governance. Our surveys of corporate managers corroborate these results.
Keywords: Earning Announcements, Governance, Opportunism, Timing
JEL Classification: G11, G14
Suggested Citation: Suggested Citation