How do different types of investors react to new earnings information?

A Ekholm

Research output: Contribution to journalArticleScientificpeer-review

13 Citations (Scopus)

Abstract

The purpose of this study is to investigate how different types of investors react to new earnings information. Using the extremely comprehensive official register of share holdings in Finland, we find that the majority of investors are more likely to sell (buy) stocks in a company after a positive (negative) earnings surprise and that they are biased towards buying after the disclosure of an annual report. Large investors show behaviour opposite to that of the majority of investors. We consider several possible explanations for this heterogeneous investor behaviour, of which differences in investor overconfidence emerges as the strongest candidate.
Original languageEnglish
Peer-reviewed scientific journalJournal of Business Finance & Accounting
Volume33
Issue number(1)&(2)
Pages (from-to)127-144
Number of pages18
DOIs
Publication statusPublished - 2006
MoE publication typeA1 Journal article - refereed

Keywords

  • earnings
  • investor reaction
  • investor types
  • investor behaviour
  • market efficiency
  • COMMON-STOCK INVESTMENT
  • SMALL TRADERS
  • OVERCONFIDENCE
  • MARKET
  • NEWS
  • PERFORMANCE
  • BEHAVIOR
  • PRICE

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