The impact of insider ownership and institutional ownership on post-earnings-announcement-drift: Evidence from Vietnam

Tuan Q. Ho, Y. Nguyen and Hieu Tran

Research in International Business and Finance, 2024, vol. 70, issue PB

Abstract: In this study, we first document the existence of post-earnings-announcement-drift (PEAD) in Vietnam, consistent with investors’ under-reaction to earnings surprises. We then investigate whether and how institutional ownership and insider ownership affect PEAD. We find that the magnitude of PEAD effect is stronger among firms with higher insider ownership. We argue that higher insider ownership may increase information opacity and impede efficient processing of earnings news among investors. We provide supporting empirical evidence for this argument. Furthermore, in contrast to the conventional view that institutional investors exploit PEAD and accelerate the speed of price discovery, we find that institutional investors do not have significant impacts on PEAD. We argue that this result is consistent with recent findings in the US and China that some institutional investors may herd, hence, not necessarily help to mitigate PEAD. Our findings provide useful insights about the effect of insider investors and institutional investors on the delayed response to earnings news in the context of Vietnam.

Keywords: Post earnings announcement drift; Institutional ownership; Insider ownership; Under-reaction; Earnings news (search for similar items in EconPapers)
JEL-codes: G14 G20 M41 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0275531924001454
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:riibaf:v:70:y:2024:i:pb:s0275531924001454

DOI: 10.1016/j.ribaf.2024.102352

Access Statistics for this article

Research in International Business and Finance is currently edited by T. Lagoarde Segot

More articles in Research in International Business and Finance from Elsevier
Bibliographic data for series maintained by Catherine Liu ().