The informativeness of earnings announcements during times of global uncertainty: Evidence from the Covid‐19 pandemic
研究了新冠疫情如何影响投资者对盈余公告信息含量的评估，发现疫情期间盈余公告的信息含量下降，且受地理分散度和机构持股比例影响。
Abstract Research Question/Issue This study shows how investors assessed the informativeness of earnings announcements during the Covid‐19 pandemic. Prior studies suggest that earnings announcements are more likely to provide value to investors during periods of heightened uncertainty. However, the massive regulatory intervention that took place during the pandemic is likely to have led investors to seek alternative sources of information and to have reduced their reliance on earnings to price stocks. Moreover, the uncertainty brought by Covid‐19 directly challenged firms' value drivers and business models, potentially inhibiting the ability to map earnings onto stock prices. Research Findings/Insights The empirical findings show that earnings announcements lost part of their information content during the Covid‐19 crisis. Cross‐sectional tests document that geographic dispersion of operations and the degree of institutional ownership significantly affected the relationship under study. We also find that the loss of earnings announcements' informativeness was driven by exposure to the pandemic. Theoretical/Academic Implications The recent accounting literature investigates the role of accounting information in supporting public policy during systemic crises. Our results highlight the firm‐specific attributes that affect investors' perceptions of the informativeness of earnings announcements by showing how geographic dispersion and ownership structure affect it in periods of uncertainty. Practitioner/Policy Implications In a context in which earnings announcements' informativeness decreases, regulators and standard‐setters should consider taking corrective action to restore its informativeness, such as by strengthening disclosure requirements. The documented decrease in the informativeness of earnings announcements could be partially offset by heightening disclosure requirements to complement financial statements.