Warning bell on financial crisis: Market-wide information-reporting strategy from an earnings perspective

• Main Authors: Yueh-Hung Chen, 陳岳鴻
• Other Authors: 劉啟群
• Format: Others
• Language: en_US
• Published: 2017
• Online Access: http://ndltd.ncl.edu.tw/handle/3s99zc

博士 === 國立臺灣大學 === 會計學研究所 === 105 === I investigate the market-wide and firm-specific information-disclosure behavior. Using letters to shareholders from Standard & Poors (S&P) 500 Index’s financial institutions, I find more than half of the sampled managers’ letters to shareholders in 2007 disclosed crisis information, immediately prior to the 2008 crisis. This paper documents a negative reporting-strategy relationship between the firm-specific information of past positive earnings performance expression and market-wide information about the financial crisis. Further findings reveal that the managers’ conditional probability of disclosing their outlook of the imminent crisis increased with future negative earnings changes, supporting the position that the letters to shareholders conveyed market-wide information as a “warning bell” prior to the crisis.