Use of Interim Earnings Information on the Helsinki Stock Exchange

27 Pages Posted: 11 Sep 2004

See all articles by Markku J. Vieru

Markku J. Vieru

University of Lapland - Faculty of Social Sciences, Multidimensional Tourism Institute

Hannu J. Schadewitz

Turku School of Economics at the University of Turku - Department of Accounting & Finance

Date Written: August 2004

Abstract

In this paper we study how the market uses the information on current and past interim earnings. Our hypothesis is that investors focus on a comparison of year-to-year changes in interim earnings. We provide further evidence on how the market acts in the face interim earnings announcements in an emerging market. The data is based on the Finnish market covering the years 1992-2002. We found, consistent with Ball and Bartov, evidence that investors underestimate the magnitude of the serial correlation in interim earnings. The results suggest that investors use, at least in part, a seasonal random walk model when forming earnings expectations.

Keywords: Anomalies, time series forecasts, emerging capital markets

JEL Classification: D23, D82, G18

Suggested Citation

Vieru, Markku and Schadewitz, Hannu J., Use of Interim Earnings Information on the Helsinki Stock Exchange (August 2004). Available at SSRN: https://ssrn.com/abstract=587721 or http://dx.doi.org/10.2139/ssrn.587721

Markku Vieru (Contact Author)

University of Lapland - Faculty of Social Sciences, Multidimensional Tourism Institute ( email )

P.O. Box 122
Rovaniemi FIN-96101
Finland
+358 400 377641 (Phone)
+358 16 341 2600 (Fax)

Hannu J. Schadewitz

Turku School of Economics at the University of Turku - Department of Accounting & Finance ( email )

Rehtorinpellonkatu 3
FIN-20500 Turku
Finland
+358 2 333 9321 (Phone)
+358 2 333 9350 (Fax)

HOME PAGE: http://www.utu.fi/en/people/hannu-schadewitz

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