| Self-serving attribution is one of the methods which the company’s managementsuse to announce and interpret the company’s operating performance. The informationis asymmetry between the shareholders and managements, the profits can be huge, allthe factors provide opportunities and enough motivation for managements to explainthe achievement by self-interest, which will damage the company shareholders’interest. So, it has certain theory significance to discuss how the self-interestattribution influences the stock market under different situation.The existing literature used cross-sectional data for research, and this paper uses4years of data to establish a panel data model. Selecting the Shanghai A plate listedmanufacturing companies as the research sample and collecting annual report datafrom2009to2012four years, selecting the cumulative abnormal return as thedependent variable, using Stata software to establish the panel data model to do theempirical analysis. The article not only discusses the existence of self-servingattribution of the annual report, but also explores the market reaction to theself-serving attribution under the effect of different factors: the one is unexpectedearning, the other one is company size.The results show that self-serving is really present in company’s annual reportwhether its performance increased or reduced, and it supports the share price on someextent. When unexpected earning is positive, the self-serving attribution behavior ofmanagers will promote cumulative abnormal return changes in the same direction;when unexpected earning is negative, its regulation is not obvious. And under theeffect of company size, the self-serving attribution and cumulative abnormal returnare negative correlation. Because if the size is bigger, it will have more attention, atthe same time, the readers get more channels for company information easier to findtraces of self-serving attribution, which will leading investors reduce the resources tocompany. |
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