Research On The Timeliness Of Company’s Earnings Announcement,Selection Preference And Investment Strategy

In recent years,the domestic and foreign scholars have studied the relationship between the earnings announcement timeliness and the earnings announcement effects,but less from the micro perspectives of investors.The semi-strong effective market indicates that the price of the securities has reflected all the public information of the securities.With the development of information technology in modern society,information can be almost instantaneous.So,according to the effective market theory,the modern securities market should reach a semi-strong effective market.However,the fact is not the case,various market ambitions are endless.The main reason is that effective market theory is based on a series of strict assumptions.Efficient market theory assumes that people are rational,rational people can not only take all actions to pursue their best interests,but also in the process to notice all the information and make the right treatment.Information flow in the market and the speed of transmission will be influenced by the negligence and the level of investors’ attentions of the information,these factors will lead to the gradual proliferation of information,resulting in the delayed response to information.Firstly,this paper analyzes the relation between the investors’ attentions and effect of the earning announcements from investors’ limited attentions into firms’ information disclosure process and find that investors’ different attention levels will have an impact on the information efficiency.If investors pay high attentions to the stock,earnings news can be more efficient into the stock price.secondly,this paper first examines the correlation between the earning announcements timeliness and the concerns of investors by empirical analysis through Chinese listed companies’ annual report data.Then,according to the previous theoretical deductions,analyze the influence of the earning announcements timeliness on the stock price after the announcement.This paper defines the excess returns from window periods of CAR [-1,1] and CAR [2.20] to measure the degree of post-announcement effects and stock price drifts,through the abnormal volume to measure the investor’s attentions.On the basis of controlling the unexpected earnings,on the day which the earnings disclosure date is relatively lagging,investors’ attentions are lower.By setting up the interaction between the timeliness of the earnings announcement and the unanticipated earnings to capture the effect of the earning announcements timeliness during annual disclosure period on market reactions toward the earning announcements,the study finds that the earning announcements timeliness is positively correlated with the market’s response and advance(or postponed)earning announcements significantly improve(or reduce)the market’s response to earnings information.Since the delayed disclosure of earnings information can reduce the efficiency of price response to information,this paper further examines the existence of time-based disclosure of earnings information based on attention managements.Empirical found that the company’s management is very concerned about the company’s short-term stock performance,when the company’s performance is poor,the manager chose to disclose the annual report later;and when the company’s performance is better,the company managers will choose an earlier publication of the annual report,which indicate that listed company managers have time-based information disclosure preferences.Then,developing investment strategies in the Fama-French three-factor model calculating the daily excess returns of portfolios based on timeliness of earning announcement and managers’ choose preferences.Finally,this paper analyzes the motivations and purposes of disclosing the earnings announcement from the perspective of investor protections.Understanding the listed companies’ preferences for disclosure,for individual investors: make profits or avoid losses;for regulators: improve the quality of market transactions and reduce market irrational fluctuations.