The five-day workweek system and investor inattention

Tae Wook Kim and Dainn Wie

Asia-Pacific Journal of Accounting & Economics, 2018, vol. 25, issue 3-4, 419-432

Abstract: In this paper, we show that work schedule is a key factor driving investor inattention to Friday earnings announcements using the introduction of the five-day workweek system in the financial sector of Korea in 2002 as a natural experiment. Our analyses show a stronger immediate response and a weaker delayed response to Friday news under the six-day workweek system. The trend was, however, reversed under the five-day workweek system. We also find out consistent evidence from the movement of trading volume. These findings demonstrate that the trade-off between weekend distraction and additional working hours during the weekend determines investors’ attention to Friday earnings announcements.

Date: 2018
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DOI: 10.1080/16081625.2017.1298455

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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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