Weather, institutional investors and earnings news

Danling Jiang, Dylan Norris and Lin Sun

Journal of Corporate Finance, 2021, vol. 69, issue C

Abstract: We examine how pre-announcement weather conditions near a firm's major institutional investors affect stock market reactions to firms' earnings announcements. We find that unpleasant weather experienced by institutional investors leads to more delayed market responses to subsequent earnings news. Moreover, unpleasant weather of institutional investors is associated with higher earnings announcement premia. The influence of institutional investors' weather is robust after controlling for New York City weather, extreme weather conditions, and firm local weather. Additional cross-sectional evidence suggests that the strength of this weather effect is related to institutional investors' trading behavior.

Keywords: Weather condition; Institutional investor; Earnings announcement; Post-earnings-announcement drift (search for similar items in EconPapers)
JEL-codes: G02 G14 G23 M41 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:69:y:2021:i:c:s0929119921001115

DOI: 10.1016/j.jcorpfin.2021.101990

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