The Effects of Uncertainty on the Informativeness of Earnings: Evidence from the Insurance Industry in the Wake of Catastrophic Events
Theodore E. Christensen
Additional contact information
Theodore E. Christensen: Brigham Young University, USA
Journal of Business Finance & Accounting, 2002, vol. 29, issue 1&2, 223-255
This study examines the effects of uncertainty associated with large-scale catastrophes on the informativeness of earnings announcements by property and casualty insurers. It contributes to the literature on the effects of uncertainty on the informativeness of earnings announcements by distinguishing between: (1) uncertainty due to exogenous events that obscure the firm's future prospects, and (2) uncertainty due to noise in earnings. Results suggest that heightened uncertainty associated with exposure to catastrophe losses is significantly positively associated with the market's response to earnings reports, even after controlling for uncertainty due to noise in earnings. This implies that during periods of high uncertainty, investors find earnings information more useful in assessing the future prospects of the firm. Copyright Blackwell Publishers Ltd 2002.
References: Add references at CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed
Downloads: (external link)
http://www.blackwell-synergy.com/doi/abs/10.1111/1468-5957.00430 link to full text (text/html)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bla:jbfnac:v:29:y:2002:i:1&2:p:223-255
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0306-686X
Access Statistics for this article
Journal of Business Finance & Accounting is currently edited by P. F. Pope, A. W. Stark and M. Walker
More articles in Journal of Business Finance & Accounting from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().