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The five-day workweek system and investor inattention

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  • Tae Wook Kim
  • Dainn Wie

Abstract

In this paper, we show that work schedule is a key factor driving investor inattention to Friday earnings announcements using the introduction of the five-day workweek system in the financial sector of Korea in 2002 as a natural experiment. Our analyses show a stronger immediate response and a weaker delayed response to Friday news under the six-day workweek system. The trend was, however, reversed under the five-day workweek system. We also find out consistent evidence from the movement of trading volume. These findings demonstrate that the trade-off between weekend distraction and additional working hours during the weekend determines investors’ attention to Friday earnings announcements.

Suggested Citation

  • Tae Wook Kim & Dainn Wie, 2018. "The five-day workweek system and investor inattention," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 25(3-4), pages 419-432, May.
    • Handle: RePEc:taf:raaexx:v:25:y:2018:i:3-4:p:419-432
    DOI: 10.1080/16081625.2017.1298455
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