The Research On The Effects Of Investors' Attention On Management's Earnings Announcement Disclosure

Compared with the relatively decentralized distribution of yearly reports disclosure date of public companies in American stock market,our country's market obviously has centralized distribution phenomenon,a large number of yearly report disclosures concentrate in late march to late April.According to the behavioral corporate finance theory,that company managers' decision can be affected by investors' irrational behavior,and the decision of earning announcement disclosure,as one kind of the management decisions,is no exception.We argue that,in addition to the objectively required some time in preparing yearly report,listed companies may have preferences for time and content of earnings announcements disclosure.Recently,research from the perspective of investors' attention on the public company information disclosure decisions has taken more and more focus.Investors may own "cognitive bias" because their ability to process information is limited to information disclosure time.This exactly provides an opportunity for listed companies to take different information disclosure strategies for their special purposes.Thus,by considering investors' objective cognitive biases of "limited attention",our research studied the influence of investors' attention on the behavior of earnings announcement disclosure.This research will not only help investors make judgment on equity price and make investment decisions on the basis of earning information,so as to improve their portfolio returns,but also help regulators to strengthen the supervision of information disclosure of public companies and improve the efficiency of market information.The following is our research idea: Firstly,according to the “Limited Investors' Attention Hypothesis”,we explained the earnings announcement effect,and according to the “Stakeholders' Hypothesis”,we explained the earning announcement disclosure timing behavior of management.Secondly,with reference to the theoretical model of share price reaction to the earning information built by Dellavigna and Pollet(2009),we proposed our research hypothesis in this paper followed by model derivation and theory elaboration.Thirdly,we choose the daily earning announcement number as investors' attention measurement,by taking the data of yearly earnings announcements of public companies in China A-share market as sample,we made empirical analysis to resolve the following three issues:(1)Whether does investors' attention can affect the earning announcement disclosure behavior of the management,if it does,why;(2)How does investors' attention affect management earning announcement disclosure content;(3)Whether does management disclosure behavior take on some calendar pattern.Finally,according to the research conclusions,we proposed some relevant suggestions for investors and regulators.Through the research,we have obtained the following conclusions:(1)the impact of investorattention on the market reaction to the earnings announcement provides adequate motivation for management to time the earning announcement disclosure.Because investors' limited attention can strengthen the PEAD whereas extreme high attention can weaken the PEAD.(2)The management does have the behavior of optimizing earnings announcement disclosure at different investors' attention degree,that is,the management inclined to release good news on high-attention days and release bad news on low-attention days.(3)the disclosure date of earning announcement decided by managements exhibits a “week effect”,that is the managements prefer to release bad news on Tuesday,Friday and Saturday,which are low-attention days,while release good news on Monday,Wednesday and Thursday,which are high-attention days.