Market Reactions to Earnings Surprise and Revenue Surprise

Peer reviewed: 
No, item is not peer reviewed.
Scholarly level: 
Graduate student (Masters)
Date created: 
2016-10
Keywords: 
Market reaction
Earnings surprise
Revenue surprise
Market capitalization
R&D intensity
Corporate governance
Abstract: 

This study is based on Kama’s (2009) research on the difference between the market reactions to revenue surprise compared to earnings surprise. In addition, we analyse the effect of corporate governance on these results. We show that earnings surprise has a more significant effect on market reactions than revenue surprise. Furthermore, the market reacts more to earnings information when companies have good corporate governance as measured by analyst following. Interestingly, the market reacts stronger to revenue surprise than earnings surprise in high R&D intensity companies.

Description: 

Master of Science in Finance Program - Simon Fraser University

Language: 
English
Document type: 
Graduating extended essay / Research project
Rights: 
Rights remain with the authors.
Senior supervisor: 
Amir Rubin
Department: 
Beedie School of Business - Segal Graduate School
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