In this study, we examine the effect of investor sentiment on the stock market reaction to earnings news (i.e., the earnings response coefficient or ERC) for loss firms. We find that the ERC for loss firms' earnings increases is less positive as sentiment increases, contrary to the findings in...

Prior research examines financial reporting of revenue in the context of how the incentives to achieve the earnings goal affect revenue reporting. In contrast, this study investigates how firms respond to sector-level incentives related to both revenue and earnings when evaluating the importance...