Bank Monitoring and Managerial Procrastination: Evidence from the Timing of Earnings Announcements
Posted: 30 Jul 2015
Date Written: July 25, 2015
Abstract
I examine the role of bank monitoring in the timing of earnings announcements. Managers have been shown to procrastinate and delay the public release of bad news on earnings. I find that banks discipline and prevent such managerial procrastination of earnings disclosures to the public. Moreover, I find that the market is more tolerant of delays in the public release of earnings information in the presence of a bank lending relationship. Thus, the negative abnormal return accompanying late releases of earnings information is observed only when a bank lending relationship is not present.
Keywords: Bank Monitoring, Lending Relationships, Earnings Announcement
JEL Classification: G21, G30
Suggested Citation: Suggested Citation