The effects of management change on the capital market's response to earnings announcements
This study extends Pourciau (1993) by examining the link between executive succession and the capital market's response to earnings announcements. Two competing predictions are proposed. First, prior studies have shown that executives manage earnings downward in the year of management change and upward the following year. Managed earnings are more noisy than unmanaged earnings. Since there is an inverse relationship between the perceived noise in earnings and the ERC, the study proposes that the ERC will be less in the year of and the year following a management change than in the year prior to the change.
Authors: | Rose-Green, Ena Patricia |
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Publisher: |
Florida State University Libraries |
Subject: | Business Administration | Accounting | Commerce-Business |
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