Competing Earnings Announcements: Which Announcement Do Investors Process First?
James R Frederickson, Leon Zolotoy
ACCOUNTING REVIEW | AMER ACCOUNTING ASSOC | Published : 2016
Consistent with investors having limited attention, we posit that when faced with competing earnings announcements, investors behave as if they queue the announcements based on a firm or earnings announcement attribute. We focus on two potential queuing attributes: (1) firm visibility, and (2) the expected cost of processing the earnings announcements. We find no support for queuing based on the latter, but find a statistically significant and economically meaningful queuing effect based on firm visibility. Earnings announcements made by firms that are more visible than a given firm-but not by firms that are less visible-mitigate the announcement window market response to that firm's unexpec..View full abstract