Market Reactions to Earnings Surprise and Revenue Surprise

Date created
2016-10
Authors/Contributors
Author: Ji, Yuan
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.
Document
Description
Master of Science in Finance Program - Simon Fraser University
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Copyright is held by the author(s).
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Peer reviewed?
No
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