Deregulation and Accounting Earnings Information

Wikil Kwak ； Richard G. File ； Jang Youn Cho ； Yonpae Park

《Advances in Investment Analysis and Portfolio Management》 2期 (2006/11) Pp. 51-84

https://doi.org/10.6291/AIAPM.2006.02.04

並列摘要

This paper examines the empirical evidence of the effect of deregulation on the informativeness of earnings reports within the airline and trucking industries. Specifically, we test how deregulation affects the stock return variability around quarterly earnings announcement dates, and the impact of deregulation on analyst forecast revision coefficients.
Our results generally support our predictions. Deregulation resulted in a significant increase in return variability for the experimental group over time. This increase did not occur, however, for regulated control firms or non-regulated control firms. When intergroup comparisons between deregulated firms and regulated control firms are made, there is a significant increase in return variability after the deregulation of experimental firms, but the intergroup comparison between deregulated firms and non-regulated control firms do not show any significant changes in return variability at the time of the deregulation of the experimental firms. A second measure of informativeness, the analysts' revision coefficient, is also employed but, the results are mixed. When the time period is extended more than five years, this trend is not as striking. These results generally imply that financial statements become more informative and more important to users for several years after deregulation.

並列關鍵字

deregulation ； stock return variability ； analyst forecast revision coefficients

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