Fu, Z., Ma, Y., Li, S. et al. (1 more author) (2022) Peer performance and the asymmetric timeliness of earnings recognition. International Review of Financial Analysis, 85. 102427. ISSN 1057-5219
Abstract
This paper investigates the impact of peer performance on the asymmetric timeliness of earnings recognition. We find a positive relationship between peers' weak performance and timely bad news disclosure. Our results are robust to a variety of tests, including instrument variable approach, difference-in-differences analysis, alternative measures and subsample analysis. Consistent with the notion that weak peer performance increases investors' demand for information, the relationship is more profound for firms suffering from high information externality, with weak governance and high information asymmetry. Furthermore, we find that the relationship is difficult to reconcile with the explanation of managers' herding behaviour. In addition, we show that conservative accounting information disclosure due to weak peer performance alleviates managerial bad news hoarding and information asymmetry for underperforming firms, but distorts investment decisions for outperforming firms. We highlight the spillover effect of peer performance on conservative accounting information and the related heterogeneous outcomes.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2022 Elsevier Inc. This is an author produced version of an article published in International Review of Financial Analysis. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | Peer effect, Accounting conservatism, Information asymmetry, Crash risk, Governance |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Accounting & Finance Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 20 Nov 2023 10:40 |
Last Modified: | 09 May 2024 00:13 |
Status: | Published |
Publisher: | Elsevier |
Identification Number: | 10.1016/j.irfa.2022.102427 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:205485 |
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