The Impact of the Internet on Earnings Announcements

57 Pages Posted: 30 Jan 2003 Last revised: 4 Oct 2014

See all articles by Marvin Wee

Marvin Wee

Australian National University (ANU); Financial Research Network (FIRN)

Iain Watson

The University of Western Australia - Department of Accounting and Finance

Terence S.N. Chan

University of Western Australia

Date Written: December 23, 2002

Abstract

This study examines the impact of the Internet on earnings announcements, in an Australian context, with relation to: (1) information content; (2) post-earnings announcement drift; and (3) information asymmetry. Our results for the pre-Internet (1996) and the post-Internet (2000) periods provide no evidence of significant changes in the information content of earnings announcements. However, we detect a reduction in both the magnitude and duration of the post-earnings announcement drift in the post-Internet period for the positive unexpected earnings decile. Further our results suggest that the introduction of the Internet has improved information dissemination and lessened information asymmetry surrounding earning announcements.

Keywords: Online trading, information content, PEAD, intraday market liquidity

JEL Classification: G10, G14

Suggested Citation

Wee, Marvin and Watson, Iain and Chan, Terence S.N., The Impact of the Internet on Earnings Announcements (December 23, 2002). Pacific-Basin Finance Journal, Vol. 13, No. 3, 2005. Available at SSRN: https://ssrn.com/abstract=365480 or http://dx.doi.org/10.2139/ssrn.365480

Marvin Wee (Contact Author)

Australian National University (ANU) ( email )

The Australian National University
College of Business and Economics
Canberra, 2601
Australia
+61 2 61250416 (Phone)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Iain Watson

The University of Western Australia - Department of Accounting and Finance ( email )

School of Business
35 Stirling Highway
Crawley, Western Australia 6009
Australia

Terence S.N. Chan

University of Western Australia ( email )

Business School
35 Stirling Highway
Crawley WA 6009
Australia

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