Athanasakou, Vasiliki E., Strong, Norman C and Walker, Martin (2014) The relative concentration of bad versus good news flows. Department of Accounting, The London School of Economics and Political Science, London, UK.
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Abstract
This paper examines flows of bad and good news as a feature of the firm’s information environment. We argue that to the extent that managers delay reporting bad news, this leads to bad news being more concentrated. Measuring flows of bad and good news using flows of negative and positive abnormal stock returns, we find that firms with higher volatility of operations and managerial incentives to withhold bad news exhibit relatively more concentrated bad news flows. This relative concentration is also positively associated with lower earnings quality and a higher risk of shareholder litigation. Our results suggest that the relative concentration of bad and good news flows is related to the quality of the firm’s information environment.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Official URL: | http://www.lse.ac.uk/accounting/Home.aspx |
| Additional Information: | © 2014 The Authors |
| Library of Congress subject classification: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HE Transportation and Communications H Social Sciences > HF Commerce > HF5601 Accounting |
| Sets: | Departments > Accounting |
| Funders: | Economic and Social Research Council (ESRC) |
| Date Deposited: | 11 Nov 2014 17:15 |
| URL: | http://eprints.lse.ac.uk/60139/ |
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