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Cross-Border Information Transfers: Evidence from Profit Warnings Issued by European Firms

Author

Listed:
  • Paulo Alves

    (Faculdade de Economia e Gestão, Universidade Católica Portuguesa - Porto, and Lancaster University)

  • Peter Pope

    (Lancaster University)

  • Steven Young

    (Lancaster University)

Abstract

This paper reports evidence on cross-border accounting information transfers associated with profit warning announcements. Using a sample of firms from 29 European countries, we find that negative earnings surprises disclosed by firms in one country affect investors’ perceptions of comparable nonannouncing firms in other countries. The form and magnitude of cross-border effects is consistent with domestic transfers. Tests explaining variation in cross-border information transfers provide some (albeit rather limited) evidence that effects vary according to a range of firm-, industry- and country-level characteristics.

Suggested Citation

  • Paulo Alves & Peter Pope & Steven Young, 2009. "Cross-Border Information Transfers: Evidence from Profit Warnings Issued by European Firms," Working Papers de Gestão (Management Working Papers) 01, Católica Porto Business School, Universidade Católica Portuguesa.
    • Handle: RePEc:cap:mpaper:012009
    as

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    File URL: http://www.feg.porto.ucp.pt/docentes/repec/WP/012009%20-%20Alves%20-%20%20International%20IT.pdf
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    References listed on IDEAS

    as
    1. Foster, George, 1981. "Intra-industry information transfers associated with earnings releases," Journal of Accounting and Economics, Elsevier, vol. 3(3), pages 201-232, December.
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    Cited by:

    1. Cox, Raymond A.K. & Dayanandan, Ajit & Donker, Han, 2016. "The Ricochet Effect of Bad News," The International Journal of Accounting, Elsevier, vol. 51(3), pages 385-401.
    2. Ormazabal, Gaizka & Badia, Marc & Duro, Miguel & Jorgensen, Bjorn N., 2017. "Market-wide Effects of Off-Balance Sheet Disclosures:," CEPR Discussion Papers 12152, C.E.P.R. Discussion Papers.

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    Keywords

    Information transfers; Profit warnings;

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