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Investors' Reaction to Financial Reporting – Empirical Studies on Price Volatility on the Bucharest Stock Exchange

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  • Ioan-Ovidiu Spătăcean

    (Faculty of Economics and Law, ED1 Department – Economic Sciences, University of Medicine, Pharmacy, Sciences and Technology “George Emil Palade” from Targu Mures, Gh. Marinescu Street, no. 38, Targu Mures, 540139, Romania)

  • Maria Cristina HERȚEG

Abstract

In this study, the impact of financial reporting upon investment decision is assessed through investors' behavior and measured by the stock price variation. This research analyzes preliminary, semestrial, and quarterly financial reports from 24 BSE listed companies, namely companies within the BET XT index (14) and companies within the BET AeRO index (10), over the reporting periods between 2018 and 2022. The main finding shows that investors, instead of being influenced by the market general trend, reacted rationally in 47% of the cases as they assigned the highest importance to the fundamentals from the preliminary reports. Based on the results obtained from the two indicators introduced in the research, we concluded that between financial reporting and market sentiment, the factor with the highest level of influence on price variation was financial reporting.

Suggested Citation

  • Ioan-Ovidiu Spătăcean & Maria Cristina HERȚEG, 2023. "Investors' Reaction to Financial Reporting – Empirical Studies on Price Volatility on the Bucharest Stock Exchange," Acta Marisiensis. Series Oeconomica, "George Emil Palade" University of Medicine, Pharmacy, Sciences and Technology of Târgu-Mureș, România - Faculty of Economics and Law, vol. 1, pages 47-55, December.
    • Handle: RePEc:pmu:oecono:v:1:y:2023:p:47-55
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    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
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets

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