Abstract
In the broad, the market reacts to the earnings forecast disclosure in three ways, namely, under reaction, overreaction and expected reaction. Generally, if the market has already overreacted (under reacted) to the disclosed earnings forecast, the company will show a weak (strong) inclination to keep disclosing information. This paper studies companies which are listed on the Shanghai and Shenzhen stock exchange and have issued their earnings forecast during 2004-2006. The result shows that, what is taken in consideration when the manager decides to disclose information is how the stock market responds to the former information. If the management found the market has overreacted to its good news, the inclination for further release should be decreased, similarly if the market has under reacted to its bad news. In a word, the decision to disclose its earnings forecast or not is on the basis of consideration of past market reaction, not only on the basis of the type of news.
Original language | English |
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Title of host publication | 2010 International Conference on Management Science and Engineering, ICMSE 2010 |
Publisher | IEEE, Institute of Electrical and Electronics Engineers |
Pages | 1359-1364 |
Number of pages | 6 |
ISBN (Print) | 9781424481163 |
DOIs | |
Publication status | Published - 2010 |
Event | International Conference on Management Science and Engineering 2010 - Melbourne, Australia Duration: 24 Nov 2010 → 26 Nov 2010 Conference number: 17th |
Conference
Conference | International Conference on Management Science and Engineering 2010 |
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Abbreviated title | ICMSE 2010 |
Country/Territory | Australia |
City | Melbourne |
Period | 24/11/10 → 26/11/10 |
Keywords
- Chinese a-share market
- Earnings forecast
- Market reaction
- Voluntary disclosure