Differential Stock Market Reactions to the Presentation and Timing of the Announcements of Restructuring Charges and Write -Offs

I set up three hypotheses that predict the association between the true firm quality, the decisions regarding announcement and announcement type, and the market reactions to the announcement. I then develop a two-dimensional framework based on the presentation and timing of the announcements to analyze the effect of management's communication to investors. I use a sample of announcements of large negative special charges that were announced during 1986--1992, when the managers of firms had a great deal of discretion in announcing special charges. The results are consistent with a signaling scenario. Corporate managers intentionally choose presentation and timing of special charge announcements, using the flexibility allowed under the absence of relevant accounting rules, in order to send a signal to reveal their true quality to investors. Also, the market interprets the signal appropriately.

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Accountancy

Grantor

University of Illinois at Urbana-Champaign

Year dc:date

2015

Author dc:creator

• Paik, Gyung Hyun

Contributors dc:contributor

• Sougiannis, Theodore

• Economics, Finance

Language dc:language

eng

Identifier

(MiAaPQ)AAI3023162

OAI identifier oai:identifier

oai:www.ideals.illinois.edu:2142/87148