A Comparison of the Effects of Earnings Disclosures on Information Asymmetry: Evidence from France and the U.S

Jean-François Gajewski and Quéré, Bertrand ¨P.

The International Journal of Accounting, 2013, vol. 48, issue 1, 1-25

Abstract: This study investigates how the release of interim and annual earnings announcements affects information asymmetry in the French and U.S. stock markets. There appears to be a high degree of market scrutiny around interim earnings announcement dates in the U.S. market. Asymmetric information situations may exist prior to interim earnings announcements, but they are quickly resolved after the earnings announcement. In France, investors seem to pay greater attention to annual earnings announcements than to semi-annual earnings announcements, leading to a higher degree of information asymmetry around the semi-annual announcement dates. Thus, spreads are wider for semi-annual earnings announcements than for annual earnings announcements. This result confirms prior studies showing that earnings disclosures do not help to reduce information asymmetry in code-law countries, such as France. Moreover, accounting variables such as extent of accruals in operating expenses, unusual expenses, or the proportion of extraordinary items in annual earnings have a significant impact on spreads. Variables related to analysts' forecasts such as number of estimates, dispersion, and earnings surprises also influence information asymmetry among investors.

Keywords: Asymmetric information; Spread; Depth; Earnings announcement (search for similar items in EconPapers)
JEL-codes: G14 G15 G32 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0020706313000058
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:accoun:v:48:y:2013:i:1:p:1-25

DOI: 10.1016/j.intacc.2013.01.004

Access Statistics for this article

The International Journal of Accounting is currently edited by A. R. Abdel-Khalik

More articles in The International Journal of Accounting from Elsevier
Bibliographic data for series maintained by Catherine Liu ().