The Impact Of Performance Preannouncement On Market Reaction Of Financial Reports In The Perspective Of "Ostrich Effect"

With the principal-agent system of modern enterprises,serious information asymmetry occurs.It impairs traders' investment decisions,harms their interests and hinders the normal development of the financial market.Regular financial reports are important part of information disclosure of listed companies,it greatly reduce the information asymmetry.As a supplement to financial reports,performance preannouncement can announce earnings information in advance and effectively release market risks.It also alleviate stock's price fluctuations when the financial report is announced.Besides,it is conducive to the sustainable and healthy development of the securities market.In view of the important role of performance preannouncement,more and more scholars study the influence of that on the stock market from different perspectives.Combined with behavioral finance theory,this paper takes "ostrich effect" as the perspective of analysis,and studies the influence of good and bad news' performance preannouncement on the market reaction of financial report.This paper explores whether investors' irrational behaviors exists in the process of performance preannouncement to financial report,as well as the impact of that.This paper selects the companies that reported the performance preannouncement of A-share from 2013 to 2016 as the sample.According to the type of preannouncement and financial report,the companies are divided into the sample of good news and the sample of bad news.Through adopting the event study,this paper constructs the influence model of preannouncement on the excess return of individual stocks in financial report,and tests the relationship between the type of preannouncement and the market reaction of the financial report,and explores the influence of "ostrich effect".The empirical analysis of this paper gets the following conclusions.(1)For the bad news,the interval is significantly correlated with the market reaction of financial report.However,the market reaction of the preannouncement is not significantly correlated with the market of the financial report,and it does not play a moderating role in the influence of the interval on the market reaction of the financial report.(2)For the good news,the interval is not significantly correlated with the market reaction of financial report.Besides,the stronger the market reaction of the preannouncement is,the stronger the market reaction of the financial report is,and it also plays a moderating role in the relationship between the interval and the market reaction of the financial report.The empirical results show that there is "ostrich effect" in the market.When the bad news' preannouncement is announced,investors are anxious and nervous.So they take a passive attitude to the bad news and then "forget" it.When facing the good news' preannouncement,investors have a positive attitude and pay attention to it.So they will not "forget" it.Affected by the irrational behaviors,the influence of different types of performance announcement on the market reaction of the financial report is different.This paper studies the influence factors of market reaction to earnings announcement events from the behavioral perspective,which is a breakthrough and innovation to the traditional research perspective.This paper is conducive to the in-depth understanding of the irrational psychology of investors to the bad news and good news,and also helps us to learn the influence of "ostrich effect" on the stock market.