IDEAS home Printed from https://ideas.repec.org/p/cap/mpaper/012009.html
   My bibliography  Save this paper

Cross-Border Information Transfers: Evidence from Profit Warnings Issued by European Firms

Author

Listed:
  • Paulo Alves

    (Faculdade de Economia e Gestão, Universidade Católica Portuguesa - Porto, and Lancaster University)

  • Peter Pope

    (Lancaster University)

  • Steven Young

    (Lancaster University)

Abstract

This paper reports evidence on cross-border accounting information transfers associated with profit warning announcements. Using a sample of firms from 29 European countries, we find that negative earnings surprises disclosed by firms in one country affect investors’ perceptions of comparable nonannouncing firms in other countries. The form and magnitude of cross-border effects is consistent with domestic transfers. Tests explaining variation in cross-border information transfers provide some (albeit rather limited) evidence that effects vary according to a range of firm-, industry- and country-level characteristics.

Suggested Citation

  • Paulo Alves & Peter Pope & Steven Young, 2009. "Cross-Border Information Transfers: Evidence from Profit Warnings Issued by European Firms," Working Papers de Gestão (Management Working Papers) 01, Católica Porto Business School, Universidade Católica Portuguesa.
    • Handle: RePEc:cap:mpaper:012009
    as

    Download full text from publisher

    File URL: http://www.feg.porto.ucp.pt/docentes/repec/WP/012009%20-%20Alves%20-%20%20International%20IT.pdf
    File Function: First version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Foster, George, 1981. "Intra-industry information transfers associated with earnings releases," Journal of Accounting and Economics, Elsevier, vol. 3(3), pages 201-232, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cox, Raymond A.K. & Dayanandan, Ajit & Donker, Han, 2016. "The Ricochet Effect of Bad News," The International Journal of Accounting, Elsevier, vol. 51(3), pages 385-401.
    2. Ormazabal, Gaizka & Badia, Marc & Duro, Miguel & Jorgensen, Bjorn N., 2017. "Market-wide Effects of Off-Balance Sheet Disclosures:," CEPR Discussion Papers 12152, C.E.P.R. Discussion Papers.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alex Dontoh & Fayez A. Elayan & Joshua Ronen & Tavy Ronen, 2021. "Unfair “Fair Value” in Illiquid Markets: Information Spillover Effects in Times of Crisis," Management Science, INFORMS, vol. 67(8), pages 5163-5193, August.
    2. Matsumoto, Dawn A. & Shaikh, Sarah, 2017. "Discussion of “When does the peer information environment matter?”," Journal of Accounting and Economics, Elsevier, vol. 64(2), pages 215-220.
    3. Mudalige, Priyantha & Duong, Huu Nhan & Kalev, Petko S. & Gupta, Kartick, 2020. "Who trades in competing firms around earnings announcements," Pacific-Basin Finance Journal, Elsevier, vol. 59(C).
    4. Ivan E. Brick & Oded Palmon & Dilip K. Patro, 2007. "Stock Price Response to Calls of Convertible Bonds: Still a Puzzle?," Financial Management, Financial Management Association International, vol. 36(2), pages 1-21, July.
    5. R. C. Graham & C. E. Lefanowicz, 1997. "Parent and Subsidiary Earnings Announcements and Parent and Subsidiary Valuation," Accounting and Business Research, Taylor & Francis Journals, vol. 28(1), pages 3-17, July.
    6. Adhikari, Binay K. & Agrawal, Anup, 2018. "Peer influence on payout policies," Journal of Corporate Finance, Elsevier, vol. 48(C), pages 615-637.
    7. Kim, Jinhwan & Valentine, Kristen, 2023. "Public firm disclosures and the market for innovation," Journal of Accounting and Economics, Elsevier, vol. 76(1).
    8. Kothari, S.P. & Weber, Joseph & Frankel, Richard M., 2002. "Determinants of the Informativeness of Analyst Research," Working papers 4243-02, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    9. Andrew B. Jackson & Marlene A. Plumlee & Brian R. Rountree, 2018. "Decomposing the market, industry, and firm components of profitability: implications for forecasts of profitability," Review of Accounting Studies, Springer, vol. 23(3), pages 1071-1095, September.
    10. John Eshleman & Peng Guo, 2014. "The market’s use of supplier earnings information to value customers," Review of Quantitative Finance and Accounting, Springer, vol. 43(2), pages 405-422, August.
    11. Abdalla, Ahmed & Carabias, Jose M. & Patatoukas, Panos N., 2021. "The real-time macro content of corporate financial reports: a dynamic factor model approach," LSE Research Online Documents on Economics 108539, London School of Economics and Political Science, LSE Library.
    12. Ayers, Benjamin & Freeman, Robert N., 1997. "Market assessment of industry and firm earnings information," Journal of Accounting and Economics, Elsevier, vol. 24(2), pages 205-218, December.
    13. Yan Zeng & Josie McLaren, 2015. "The impact of large public sales of Government assets: empirical evidence from the Chinese stock markets on a gradual and offer-to-get approach," Review of Quantitative Finance and Accounting, Springer, vol. 45(1), pages 137-173, July.
    14. Linda H. Chen & Wei Huang & George J. Jiang & Kevin X. Zhu, 2022. "Why do investors discount earnings announced late?," Review of Quantitative Finance and Accounting, Springer, vol. 58(3), pages 977-1014, April.
    15. Byung T. Ro, 1989. "Earnings news and the firm size effect," Contemporary Accounting Research, John Wiley & Sons, vol. 6(1), pages 177-195, September.
    16. Qiu, Jiayue & Wu, Hai & Zhang, Lijuan, 2021. "In name only: Information spillovers among Chinese firms with similar stock names during earnings announcements," Journal of Corporate Finance, Elsevier, vol. 69(C).
    17. Ni, Juan & Jin, Shuchang & Hu, Yi & Zhang, Lei, 2023. "Informative or distracting: CSR disclosure of peer firms and analyst forecast accuracy," International Review of Financial Analysis, Elsevier, vol. 87(C).
    18. Isaac Quaye & Alfred Sarbah & Joseph Boadi Nyamaah & Mavis Aidoo & Yinping Mu, 2020. "Intra-Industry Information Transfers and Firm Value: Evidence From Ghana’s Banking Industry," SAGE Open, , vol. 10(4), pages 21582440209, November.
    19. Matthias Breuer, 2021. "How Does Financial‐Reporting Regulation Affect Industry‐Wide Resource Allocation?," Journal of Accounting Research, Wiley Blackwell, vol. 59(1), pages 59-110, March.
    20. Rebecca N. Hann & Heedong Kim & Yue Zheng, 2019. "Intra-industry information transfers: evidence from changes in implied volatility around earnings announcements," Review of Accounting Studies, Springer, vol. 24(3), pages 927-971, September.

    More about this item

    Keywords

    Information transfers; Profit warnings;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cap:mpaper:012009. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ricardo Goncalves (email available below). General contact details of provider: https://edirc.repec.org/data/feucppt.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.