Summary of literature related to intra-industry information transfers Author(s) Object of the study Sample Methodology Outcome Foster (1981) Intra-industry information Sample size: 75 firms in 10 SIC Analysis of the reaction of firm i’s The direction and magnitude of transfers associated with earnings industries with announcement stock price on the earnings the impact of a firm’s earnings releases. dates from 1963 till 1978 announcement of firm j. release on its own stock price is a determinant of both the direction and magnitude of the impact of that release on the stock prices of other firms in that industry. Freeman and Tse (1992) Reaction of late announcers’ Sample size: 10277 quarter Analysis of industry and firm news Late announcers’ prices reacts prices on early announcements. observations. During 1979-1988 on stock returns. best on first announcement. Information transfer is primarily positive. Thomas and Zhang (2008) The reaction of stock prices on Sample size: 245742 quarter Analysis of stock price reactions Stock price tend to overreact at intra-industry information observations. During 1973-2005 on different announcements. first and is corrected by the firm’s transfers. own earnings announcement Ramnath (2002) Investor and analyst reactions to Sample size: 428 firms in 48 Predicting the error in subsequent The forecast error of the first earnings announcements of analyst based industry groups. 11 announcer’s forecasts. announcing firm provides related firms. quarter observations from the first information about the error in the quarter of 1995 till the third of simultaneous earnings forecasts 1997. of other firms in the same industry, which still have to report their earnings.
Summary of literature related to intra-industry information transfers Author(s) Object of the study Sample Methodology Outcome Foster (1981) Intra-industry information transfers associated with earnings releases. Sample size: 75 firms in 10 SIC industries with announcement dates from 1963 till 1978 Analysis of the reaction of firm i’s stock price on the earnings announcement of firm j. The direction and magnitude of the impact of a firm’s earnings release on its own stock price is a determinant of both the direction and magnitude of the impact of that release on the stock prices of other firms in that industry. Freeman and Tse (1992) Reaction of late announcers’ prices on early announcements. Sample size: 10277 quarter observations. During 1979-1988 Analysis of industry and firm news on stock returns. Late announcers’ prices reacts best on first announcement. Information transfer is primarily positive. Thomas and Zhang (2008) The reaction of stock prices on intra-industry information transfers. Sample size: 245742 quarter observations. During 1973-2005 Analysis of stock price reactions on different announcements. Stock price tend to overreact at first and is corrected by the firm’s own earnings announcement Ramnath (2002) Investor and analyst reactions to earnings announcements of related firms. Sample size: 428 firms in 48 analyst based industry groups. 11 quarter observations from the first quarter of 1995 till the third of 1997. Predicting the error in subsequent announcer’s forecasts. The forecast error of the first announcing firm provides information about the error in the simultaneous earnings forecasts of other firms in the same industry, which still have to report their earnings.