Investor inattention to weekend disclosure of environmental punishment: evidence from China

Yucheng Zhou, Di Huo and Dejun Wu

Asia-Pacific Journal of Accounting & Economics, 2024, vol. 31, issue 2, 176-195

Abstract: The inattention hypothesis suggests that investors have a weak response to company information on weekends. Using a sample of Chinese listed companies from 2007 to 2019, we empirically study the strategic timing effect of disclosing environmental punishment information (EPI) on weekends. We find a significantly lower market reaction to EPI disclosed on weekends compared with disclosure on weekdays. Further tests show that the weekend timing effect is more pronounced when severe punishment and weak external supervision exist. Our evidence supports the inattention hypothesis from the perspective of weekend disclosure of negative environmental information.

Date: 2024
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DOI: 10.1080/16081625.2022.2147966

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Asia-Pacific Journal of Accounting & Economics is currently edited by Yin-Wong Cheung, Hong Hwang, Jeong-Bon Kim, Shu-Hsing Li and Suresh Radhakrishnan

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