Investor Protection and the Information Content of Annual Earnings Announcements: International Evidence

46 Pages Posted: 17 Sep 2004  

Mark L. DeFond

University of Southern California - Leventhal School of Accounting

Mingyi Hung

Hong Kong University of Science & Technology (HKUST)

Robert Trezevant

University of Southern California - Leventhal School of Accounting

Abstract

We draw on the investor protection literature to identify structural factors in the financial reporting environment that are likely to explain cross-country differences in the information content of annual earnings announcements. Using data from over 50,000 annual earnings announcements in 26 countries, we find that annual earnings announcements are more informative in countries with higher quality earnings or better enforced insider trading laws, and that annual earnings announcements are less informative in countries with more frequent interim financial reporting. We also find that, on average, earnings announcements are more informative in countries with strong investor protection institutions.

Keywords: Cross-country event study, Earnings announcement, Price reaction

JEL Classification: G12, G14, G15, K22, M41, M47

Suggested Citation

DeFond, Mark L. and Hung, Mingyi and Trezevant, Robert, Investor Protection and the Information Content of Annual Earnings Announcements: International Evidence. Journal of Accounting and Economics, Forthcoming. Available at SSRN: https://ssrn.com/abstract=591336

Mark DeFond

University of Southern California - Leventhal School of Accounting ( email )

Accounting Building, Room 206
Los Angeles, CA 90089-0441
United States
213-740-5016 (Phone)
213-747-2815 (Fax)

Mingyi Hung (Contact Author)

Hong Kong University of Science & Technology (HKUST) ( email )

Clearwater Bay
Kowloon
Hong Kong

Robert Trezevant

University of Southern California - Leventhal School of Accounting ( email )

Los Angeles, CA 90089-0441
United States
213-740-5013 (Phone)
213-747-2815 (Fax)

Paper statistics

Downloads
1,152
Rank
13,540
Abstract Views
4,609