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Title: The Effect of Timeliness and Credit Ratings on the Information Content of Earnings Announcements
Authors: Leventis, Stergios
Dasilas, Apostolos
Owusu-Ansah, Stephen
Type: Article
Subjects: FRASCATI::Social sciences::Economics and Business::Finance
Issue Date: 2014
Source: International Journal of the Economics of Business
Volume: 21
Issue: 3
First Page: 261
Last Page: 289
Abstract: This paper investigates the impact of timeliness and credit ratings on the information content of the earnings announcements of Greek listed firms from 2001 to 2008. Using the classical event study methodology and regression analysis, we find that firms tend to release good news on time and are inclined to delay the release of bad news. We also provide evidence that the level of corporate risk differentiates the information content of earnings according to the credit rating category. Specifically, firms displaying high creditworthiness enjoy positive excess returns on earnings announcement dates. In contrast, firms with low creditworthiness undergo significant share price erosions on earnings announcement days. We also observe a substitution effect between timeliness and credit ratings in relation to the information content of earnings announcements. Specifically, we find that as the credit category of earnings-announcing firms improves, the informational role of timeliness is mitigated.
ISSN: 1357-1516
Other Identifiers: 10.1080/13571516.2014.947194
Appears in Collections:Department of Applied Informatics

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