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Bringing the Future Forward: The Effect of Disclosure on the Returns-Earnings Relation.
- Source :
- Journal of Accounting Research (Wiley-Blackwell); Jun2002, Vol. 40 Issue 3, p809-839, 31p, 9 Charts, 1 Graph
- Publication Year :
- 2002
-
Abstract
- This paper studies how firm disclosure activity affects the relation between current annual stock returns, contemporaneous annual earnings and future earnings. Our results show that firms with relatively more informative disclosures "bring the future forward" so that current returns reflect more future earnings news. We also find that changes in disclosure activity are positively related to changes in the importance of future earnings news for current returns. These results suggest that a firm's disclosure activity reveals credible, relevant information not in current earnings, and that this information is incorporated into the current stock price. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 00218456
- Volume :
- 40
- Issue :
- 3
- Database :
- Complementary Index
- Journal :
- Journal of Accounting Research (Wiley-Blackwell)
- Publication Type :
- Academic Journal
- Accession number :
- 6682586
- Full Text :
- https://doi.org/10.1111/1475-679x.00072