Corporate governance and the information content of earnings announcements : a cross-country analysis
Using firm‐level data from 23 developed markets, we document a positive association between overall firm‐level governance quality and the informativeness of earnings announcements measured by abnormal stock return variance. This finding is robust after controlling for the potential endogeneity of fi...
| Main Authors: | , , |
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| Other Authors: | |
| Format: | Journal Article |
| Language: | English |
| Published: |
2018
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| Subjects: | |
| Online Access: | https://hdl.handle.net/10356/87986 http://hdl.handle.net/10220/46881 |
| _version_ | 1824455626863935488 |
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| author | Lau, Sie Ting Shrestha, Keshab Yu, Jing |
| author2 | Nanyang Business School |
| author_facet | Nanyang Business School Lau, Sie Ting Shrestha, Keshab Yu, Jing |
| author_sort | Lau, Sie Ting |
| collection | NTU |
| description | Using firm‐level data from 23 developed markets, we document a positive association between overall firm‐level governance quality and the informativeness of earnings announcements measured by abnormal stock return variance. This finding is robust after controlling for the potential endogeneity of firm‐level corporate governance. Further analyses reveal that firms with strong governance show little evidence of earnings management, appoint Big 4 auditing firms, and attract analyst following, implying a positive link between strong corporate governance and the information quality of earnings announcements. Finally, there is some evidence that the relation between firm‐level governance and market reactions around the announcements exists only in countries characterized by a transparent information environment and strong legal investor protection. |
| first_indexed | 2025-02-19T03:41:12Z |
| format | Journal Article |
| id | ntu-10356/87986 |
| institution | Nanyang Technological University |
| language | English |
| last_indexed | 2025-02-19T03:41:12Z |
| publishDate | 2018 |
| record_format | dspace |
| spelling | ntu-10356/879862023-05-19T06:44:42Z Corporate governance and the information content of earnings announcements : a cross-country analysis Lau, Sie Ting Shrestha, Keshab Yu, Jing Nanyang Business School Corporate Governance DRNTU::Business::Accounting Earnings Management Using firm‐level data from 23 developed markets, we document a positive association between overall firm‐level governance quality and the informativeness of earnings announcements measured by abnormal stock return variance. This finding is robust after controlling for the potential endogeneity of firm‐level corporate governance. Further analyses reveal that firms with strong governance show little evidence of earnings management, appoint Big 4 auditing firms, and attract analyst following, implying a positive link between strong corporate governance and the information quality of earnings announcements. Finally, there is some evidence that the relation between firm‐level governance and market reactions around the announcements exists only in countries characterized by a transparent information environment and strong legal investor protection. 2018-12-07T07:26:51Z 2019-12-06T16:53:33Z 2018-12-07T07:26:51Z 2019-12-06T16:53:33Z 2015 Journal Article Lau, S. T., Shrestha, K., & Yu, J. (2016). Corporate governance and the information content of earnings announcements : a cross-country analysis. Contemporary Accounting Research, 33(3), 1238-1266. doi:10.1111/1911-3846.12211 0823-9150 https://hdl.handle.net/10356/87986 http://hdl.handle.net/10220/46881 10.1111/1911-3846.12211 en Contemporary Accounting Research © 2015 Canadian Academic Accounting Association (CAAA). |
| spellingShingle | Corporate Governance DRNTU::Business::Accounting Earnings Management Lau, Sie Ting Shrestha, Keshab Yu, Jing Corporate governance and the information content of earnings announcements : a cross-country analysis |
| title | Corporate governance and the information content of earnings announcements : a cross-country analysis |
| title_full | Corporate governance and the information content of earnings announcements : a cross-country analysis |
| title_fullStr | Corporate governance and the information content of earnings announcements : a cross-country analysis |
| title_full_unstemmed | Corporate governance and the information content of earnings announcements : a cross-country analysis |
| title_short | Corporate governance and the information content of earnings announcements : a cross-country analysis |
| title_sort | corporate governance and the information content of earnings announcements a cross country analysis |
| topic | Corporate Governance DRNTU::Business::Accounting Earnings Management |
| url | https://hdl.handle.net/10356/87986 http://hdl.handle.net/10220/46881 |
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