Differential price and volume reactions to accounting earnings announcements
Article Abstract:
A study of the effect of earnings announcements on price and volume reactions is conducted. The investigation also looks into the relationship of these differential price and volume reactions to announcement-specific characteristics. The study focuses on market reactions to earnings for the fiscal quarters between 1986 and 1988 which are announced between 1986 and 1989. Results show that there was a positive relationship between the levels of price and volume reactions, although about 25% of the announcements resulted in price and volume reactions that are of quite different magnitudes. Findings also support the idea that trading volume has an inclination to be high compared to price reaction if the earnings announcements result in differential belief modifications among investors.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1995
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Trading volume and different aspects of disagreement coincident with earnings announcements
Article Abstract:
A study was conducted to examine the relationship between disagreement on announcements of accounting earnings and the trading decisions of investors. Findings revealed that the three measures of disagreement, namely previous dispersion in beliefs, belief jumbling and dispersion change, all have an impact on trading volume around announcements of earnings that are not subject to the effect of contemporaneous price reaction. Trading volume around earnings announcements is increasing in prior dispersion in beliefs, belief jumbling and dispersion change. That this disagreement has actual economic implications is made clear by the fact that trading volume that immediately surrounds announcements of earnings expands with disagreement surrounding those announcements.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1997
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Unexpected earnings, firm size, and trading volume around quarterly earnings announcements
Article Abstract:
It is suggested and confirmed and both the duration and magnitude of trading volume response to quarterly earnings reports are increasing functions of unanticipated earnings and decreasing functions of a factor altering the availability of predisclosure data: company size. Firm size may be assessed before the announcement, in contrast to unexpected gains, which are not known until earnings are actually revealed. The incremental value of actual earnings disclosures is also confirmed. Even after controlling for already known company size, unexpected earnings are still positively tied to the duration and magnitude of trading volume reaction.
Publication Name: Accounting Review
Subject: Business, general
ISSN: 0001-4826
Year: 1987
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