Please use this identifier to cite or link to this item: http://hdl.handle.net/10125/51972

Shocks to Product Networks and Post-Earnings Announcement Drift

File Size Format  
HARC_2018_paper_141.pdf 937.25 kB Adobe PDF View/Open

Item Summary

Title:Shocks to Product Networks and Post-Earnings Announcement Drift
Authors:Baik, Bok
Hoberg, Gerard
Kim, Jungbae
Oh, Peter
Keywords:Product market Networks
Supply shocks
Post-earnings announcement drift
Date Issued:31 Aug 2017
Abstract:This paper examines whether shocks to less visible product market peers are an important determinant of industry level post-earnings announcement drift (IPEAD) (Ayers and Freeman 1997; Hui et al. 2016). On the real-side, we find that a focal firm’s earnings are persistently related to the earnings surprises of its peers. On the financial-side, IPEAD arises only when these peers are less visible and when shocks are driven by persistent supply-side shocks to expenses, and not by demand-side shocks to sales. Text-based measures of disclosure opacity show that IPEAD is also stronger when firms provide less informative 10-K disclosures regarding their expenses. Collectively, our results suggest that inattention to less visible peers and a poor informational environment surrounding supply-side shocks are likely channels that generate IPEAD. IPEAD returns are economically large in subsamples motivated by this explanation.
URI:http://hdl.handle.net/10125/51972
Appears in Collections: 17 Other Research Topics (OTHERS)


Please email libraryada-l@lists.hawaii.edu if you need this content in ADA-compliant format.

Items in ScholarSpace are protected by copyright, with all rights reserved, unless otherwise indicated.