The Transmission of Corporate Financial Information Across National Borders and Equity Market Linkages

REVIEW OF ACCOUNTING STUDIES, Vol 1, No 4, 1997

Posted: 16 Apr 1997

See all articles by Michael Firth

Michael Firth

Lingnan University - Department of Finance and Insurance

Abstract

Although intra-industry earnings information transfers have been documented within individual nations, little or no attention has been given to examining whether these transfers also exist across national boundaries. This study sets out to investigate the issue by analyzing the abnormal stock market returns of British firms at the time of annual earnings announcements by U.S. corporations and the returns of U.S. firms at the time of profit announcements by British companies. Information transfers are also tested by examining whether earnings surprises of companies in one country are related to revisions in investment analysts' consensus profit forecasts of non-reporting firms in the other country. The accuracies of revisions in consensus earnings estimates are investigated. Evidence of transnational information transfers from the United States to Britain is found and the degree and level of the signal is related to various firm and industry characteristics including correlations in reported profits.

JEL Classification: G14, G15, M41

Suggested Citation

Firth, Michael, The Transmission of Corporate Financial Information Across National Borders and Equity Market Linkages. REVIEW OF ACCOUNTING STUDIES, Vol 1, No 4, 1997, Available at SSRN: https://ssrn.com/abstract=2942

Michael Firth (Contact Author)

Lingnan University - Department of Finance and Insurance ( email )

Castle Peak Road
Tuen Mun, New Territories
Hong Kong
China
+852 2616 8160 (Phone)
+852 2466 4751 (Fax)

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