Bank Monitoring Prevents Managerial Procrastination: Evidence from the Timing of Earnings Announcements

Chih-Huei (Debby) Su Banks

Journal of Behavioral Finance, 2023, vol. 24, issue 4, 428-449

Abstract: I examine the role of bank monitoring in the timing of earnings announcements. Managers have been shown to procrastinate and delay the public release of bad news on earnings. I find that banks discipline and prevent such managerial procrastination of earnings disclosures to the public. Moreover, I find that the market is more tolerant of delays in the public release of earnings information in the presence of a bank lending relationship. Thus, the negative abnormal return accompanying late releases of earnings information is observed only when a bank lending relationship is not present.

Date: 2023
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DOI: 10.1080/15427560.2022.2037597

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