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

See all articles by Roni Michaely

Roni Michaely

The University of Hong Kong; ECGI

Amir Rubin

Simon Fraser University (SFU) - Beedie School of Business; Interdisciplinary Center (IDC) Herzliyah

Alexander Vedrashko

Simon Fraser University - Beedie School of Business

Date Written: October 30, 2013

Abstract

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

Michaely, Roni and Rubin, Amir and Vedrashko, Alexander, Corporate Governance and the Timing of Earnings Announcements (October 30, 2013). Review of Finance, 2014, 18(6), 2003-2044, Available at SSRN: https://ssrn.com/abstract=1786159 or http://dx.doi.org/10.2139/ssrn.1786159

Roni Michaely

The University of Hong Kong ( email )

Pokfulam Road
Hong Kong, Pokfulam HK
China

ECGI ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Amir Rubin (Contact Author)

Simon Fraser University (SFU) - Beedie School of Business ( email )

8888 University Drive
Burnaby, British Colombia V5A 1S6
Canada

Interdisciplinary Center (IDC) Herzliyah ( email )

P.O. Box 167
Herzliya, 46150
Israel

Alexander Vedrashko

Simon Fraser University - Beedie School of Business ( email )

Beedie School of Business
8888 University Dr.
Burnaby, British Columbia V5A1S6
Canada
778-782-3471 (Phone)

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