The informativeness of consolidated and parent‐only earnings to investors: Evidence from India
利用印度强制要求同时提供合并报表和母公司报表的独特制度，研究发现母公司单独报表的季度盈余对投资者具有增量信息，且投资者对母公司意外盈余的权重高于子公司，这种权重差异反映了盈余持续性，未发现错误定价。
Abstract We examine whether earnings from parent‐only financial statements are incrementally informative to those from consolidated financial statements. We use a unique mandate in India that requires firms to provide both consolidated and parent‐level financial statements, since currently neither US GAAP nor IFRS mandates this level of disaggregation. While disaggregation provides additional information, it also imposes costs, raising the empirical question of whether its benefits outweigh the costs. Our analyses reveal that disaggregated quarterly earnings components inform investors, with investors placing more weight on parent‐level unexpected earnings than on subsidiaries' unexpected earnings. We do not find evidence of mispricing associated with disaggregation; rather, the higher weight on the parent's earnings reflects higher persistence, consistent with semi‐strong market efficiency. Moreover, parent earnings provide incremental informativeness, especially in the context of poor earnings quality and high mergers and acquisitions intensity. Our results endure when we examine annual parent‐ and subsidiary‐level earnings, where available, in 98 countries around the world. Our results contribute to the literature on disaggregation in accounting and earnings informativeness in equity markets, offering insights that may influence regulatory considerations on the usefulness of financial statement disaggregation.