Weather, Institutional Investors, and Earnings News

47 Pages Posted: 2 Apr 2021 Last revised: 2 Jun 2021

See all articles by Danling Jiang

Danling Jiang

College of Business, Stony Brook University

Dylan Norris

Troy University

Lin Sun

George Mason University

Date Written: May 21, 2021


We examine how weather conditions near a firm’s major institutional investors affect stock market reactions to firms’ earnings announcements. We find that unpleasant weather experienced by institutional investors leads to more delayed market responses to earnings news. Moreover, unpleasant weather of institutional investors is associated with higher earnings announcement premium and lower contemporaneous trading volume. The influence of institutional investors’ weather is robust after controlling for New York City weather, extreme weather conditions, and firm local weather. Additional cross-sectional evidence suggests that the strength of this weather effect is related to institutional investors’ trading behavior.

Keywords: Weather Condition, Institutional Investor, Earnings Announcement Premium, Post-earnings-announcement Drift

JEL Classification: G02, G14, G23, M41

Suggested Citation

Jiang, Danling and Norris, Dylan and Sun, Lin, Weather, Institutional Investors, and Earnings News (May 21, 2021). Journal of Corporate Finance, Forthcoming, Available at SSRN: or

Danling Jiang (Contact Author)

College of Business, Stony Brook University ( email )

306 Harriman Hall
Stony Brook, NY 11794
United States


Dylan Norris

Troy University ( email )

Troy, AL 36082
United States

Lin Sun

George Mason University ( email )

Fairfax, VA 22030
United States

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