Corporate Governance and the Information Content of Earnings Announcements: A Cross-Country Analysis.

• Autores: Sie Ting Lau, Keshab Shrestha, Jing Yu
• Localización: Contemporary Accounting Research, ISSN-e 1911-3846, Vol. 33, Nº. 3, 2016, págs. 1238-1266
• Idioma: inglés
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• Resumen

  • 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. [ABSTRACT FROM AUTHOR]