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Institutional investors and the information content of earnings announcements: the case of Poland

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  • Korczak, Piotr
  • Tavakkol, Amir

Abstract

This paper investigates the relationship between market reaction to earnings surprises and institutional concentration in the firm?s shareholders base. We use data from the Polish stock market where pension funds form a homogenous and highly competitive investor class with an increasing share in the market capitalisation and trading volume. We find evidence that higher pension funds holdings in a company tend to reduce the magnitude of market reaction around public disclosures. We interpret these findings as an information advantage that funds have over individual investors, which may result from scale economies in gathering and processing public information, as well as from access to privileged information in the interim period. We also find that company mangers are selective as to the type of information they provide to the market prior to their scheduled disclosures.
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Suggested Citation

  • Korczak, Piotr & Tavakkol, Amir, 2004. "Institutional investors and the information content of earnings announcements: the case of Poland," Economic Systems, Elsevier, vol. 28(2), pages 193-208, June.
  • Handle: RePEc:eee:ecosys:v:28:y:2004:i:2:p:193-208
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    5. Wayne R. Landsman, 2002. "Has the Information Content of Quarterly Earnings Announcements Declined in the Past Three Decades?," Journal of Accounting Research, Wiley Blackwell, vol. 40(3), pages 797-808, June.
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    Cited by:

    1. Kozhan, Roman, 2006. "Multiple Priors And No-Transaction Region," Working Paper Series 2006,4, European University Viadrina Frankfurt (Oder), The Postgraduate Research Programme Capital Markets and Finance in the Enlarged Europe.
    2. Badunenko, Oleg & Fritsch, Michael & Stephan, Andreas, 2008. "Allocative efficiency measurement revisited--Do we really need input prices?," Economic Modelling, Elsevier, vol. 25(5), pages 1093-1109, September.
    3. Jedrzej Bialkowski & Katrin Gottschalk & Tomasz Piotr Wisniewski, 2007. "Political orientation of government and stock market returns," Applied Financial Economics Letters, Taylor and Francis Journals, vol. 3(4), pages 269-273.
    4. Vigenina, Denotes & Kritikos, Alexander S., 2004. "The individual micro-lending contract: is it a better design than joint-liability?: Evidence from Georgia," Economic Systems, Elsevier, vol. 28(2), pages 155-176, June.
    5. Laivi Laidroo & Zana Grigaliuniene, 2012. "Testing for asymmetries in price reactions to quarterly earnings announcements on Tallinn, Riga and Vilnius Stock Exchanges during 2000-2009," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 12(1), pages 61-86, July.

    More about this item

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors

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