This paper aims to investigate the association between analyst forecast dispersion and investors’ perceived uncertainty toward earnings.
Abstract
Purpose
This paper aims to investigate the association between analyst forecast dispersion and investors’ perceived uncertainty toward earnings.
Design/methodology/approach
A new measure for investors’ expectations of earnings announcement uncertainty is constructed, using changes in implied volatility of option contracts prior to earnings announcements. Unlike other proxies of uncertainty, this measure isolates the incremental uncertainty regarding the upcoming earnings announcement and is a forward-looking measure.
Findings
Using this new proxy, this paper finds a significant negative correlation between analyst forecast dispersion and investors’ uncertainty regarding the upcoming earnings announcements. Further tests show that this negative correlation is driven by analysts’ private information acquisition rather than analysts; uncertainty toward upcoming earnings announcements. Additional cross-sectional tests show that this negative relationship is more pronounced in the subsample with lower earnings quality.
Social implications
This paper helps to further the understanding of the information content of analyst forecast dispersion, particularly the ways in which they gather and produce private information and their incentives for so doing.
Originality/value
This paper introduces a new market-based and forward-looking proxy of earnings announcement uncertainty that should be useful in future research. This paper also provides original empirical evidence that analysts gather and produce an additional private information to the market when facing noisy signals and that their information reduces investors’ uncertainty toward upcoming earnings announcements.
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Charles P. Cullinan, Xiaochuan Zheng and Elena Precourt
We assess whether smaller investors are more likely to hold shares of closed-end funds that invest more heavily in illiquid securities. We also examine the relationship between…
Abstract
We assess whether smaller investors are more likely to hold shares of closed-end funds that invest more heavily in illiquid securities. We also examine the relationship between the liquidity of the securities held in the portfolios of closed-end mutual funds (portfolio liquidity) and the liquidity of the closed-end funds’ shares (fund-share liquidity). Using a sample of 1,619 fund-years from 2010 to 2012, we find that smaller investors are more likely than institutional investors to own closed-end funds. We also find that the liquidity of closed-end funds’ portfolios is positively associated with the liquidity of the funds’ shares. Our findings are consistent with the “liquidity benefits” notion that closed-end funds are a means for smaller investors to invest in less liquid securities. In addition, our findings are consistent with the “valuation skepticism” notion which indicates that, due to the difficulty of objectively valuing illiquid securities, different perceptions of the value of illiquid securities held in funds’ portfolios may result in greater fund-share liquidity.
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Russell Cropanzano, Marion Fortin and Jessica F. Kirk
Justice rules are standards that serve as criteria for formulating fairness judgments. Though justice rules play a role in the organizational justice literature, they have seldom…
Abstract
Justice rules are standards that serve as criteria for formulating fairness judgments. Though justice rules play a role in the organizational justice literature, they have seldom been the subject of analysis in their own right. To address this limitation, we first consider three meta-theoretical dualities that are highlighted by justice rules – the distinction between justice versus fairness, indirect versus direct measurement, and normative versus descriptive paradigms. Second, we review existing justice rules and organize them into four types of justice: distributive (e.g., equity, equality), procedural (e.g., voice, consistent treatment), interpersonal (e.g., politeness, respectfulness), and informational (e.g., candor, timeliness). We also emphasize emergent rules that have not received sufficient research attention. Third, we consider various computation models purporting to explain how justice rules are assessed and aggregated to form fairness judgments. Fourth and last, we conclude by reviewing research that enriches our understanding of justice rules by showing how they are cognitively processed. We observe that there are a number of influences on fairness judgments, and situations exist in which individuals do not systematically consider justice rules.
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THE introduction and recent development of instruments for the accurate measurement of torsional damping capacity have provided for the metallurgist an accurate indication of this…
Abstract
THE introduction and recent development of instruments for the accurate measurement of torsional damping capacity have provided for the metallurgist an accurate indication of this property, while structural changes due to processing can be observed and much valuable information gained. It is proposed to describe some of the latest methods of recording that are available, while accessories for the pre‐stressing of specimens and examination of records are also considered. A final reference is made to the method of calculation from record measurements.
In her popular Development of Economic Analysis, Ingrid Rima writes early on of the “compatibility” of “emphasis on the state as an instrument to achieve socially optimal…
Abstract
In her popular Development of Economic Analysis, Ingrid Rima writes early on of the “compatibility” of “emphasis on the state as an instrument to achieve socially optimal results…with what has come to be called social economics”. Subsequently (1978, p. 322; 1986, p. 396), she treats of J.M. Clark's “crucial” contribution to the development (1920s/1930s) of a new type of economics he describes as “social”. Similarly, George F. Rohrlich, in his 1970 introductory essay, “The Challenge of Social Economics”, wrote of “The emerging field of social economics”, and noted that “in the United States the term was used in the 1930s and occasionally thereafter”. More recently (1982), Samuel Cameron singles out Mark A. Lutz's 1980 USE contribution, e.g., for neglecting Charles Devas(op. cit., 1876–1907) “as a contributor to the founding of social economics”, while comparing Devas to “the modern social economist”.
THE importance of instruments is nowhere more vital than in aircraft engineering and the science of flying. Indeed, the rapid progress in design made by aeronautical instruments…
Abstract
THE importance of instruments is nowhere more vital than in aircraft engineering and the science of flying. Indeed, the rapid progress in design made by aeronautical instruments in the last twenty years has to a large extent determined the phenomenal advances made in the achievements that are now being accomplished with aircraft. Not only are a large variety of precise instruments required for researches into the properties of raw materials and alloys, but accurate monitors and gauges are essential throughout every stage of construction from the minutest part to the built‐up member. In the finished aircraft, instruments become the eyes, cars, tongue and nervous system of the machine; as the practice of blind flying, intercommunication and beam landing so adequately demonstrate. A peep into the cockpit of a modern aircraft discloses, to the uninitiated, a collection of instruments of bewildering assortment, and it is for good reason that the Air Ministry, in the training of pilots, lay considerable stress on the instrument side of the science of flying. Not less in control rooms, beam stations, etc., instruments in the hands of skilled operators, play a major part in controlling, guiding, computing and the manifold tasks that are co‐incident with major actions. Although these facts are apparent to all the full extent of the essential nature of instrumental control is not adequately appreciated, except by a few, and we must necessarily wait until the end of the war before a full expression of the manifold uses and high order of precision that has been attained can be permitted to be published.
In my original efforts, I designated and depicted no less than nine “men” of economics. Essentially, I contended, as man has always tended to create God in his own image and…
Abstract
In my original efforts, I designated and depicted no less than nine “men” of economics. Essentially, I contended, as man has always tended to create God in his own image and likeness, so economists have fashioned man largely in their discipline's perceived nature and scope. These generic homines economici, that is, have thus been and perhaps cannot really be other than economists' “men”, and the study thereof provides accordingly a meaningful alternative approach to the history, nature and scope of economics itself.
In this survey, we would be concerned, not so much with the sources that provide information directly on companies themselves, as on those which contain composite statistical and…
Abstract
In this survey, we would be concerned, not so much with the sources that provide information directly on companies themselves, as on those which contain composite statistical and other types of data, often required in evaluating corporate and market performance. Some of them relate to corporate reorganizations and taxation, stock prices, price averages and indices, capital adjustments and business and financial ratios. We may also look at some books which explain the organization and functions of national and regional stock exchanges, stock market timing and forecasting techniques, statistical publications describing market activity, and some general guidebooks used often by investors.
William M. Cready and Abdullah Kumas
This analysis is the first to explore the overall roles of the offsetting attraction and distraction influences of earnings news in shaping the level of attention given to the…
Abstract
Purpose
This analysis is the first to explore the overall roles of the offsetting attraction and distraction influences of earnings news in shaping the level of attention given to the equity market by market participants.
Design/methodology/approach
We use multivariate regression approach and examine how trading activity levels within the set of non-announcing firms varies with respect to collective measures of contemporaneous earnings announcement visibility. We employ attention and information transfer theories in our hypothesis development.
Findings
This analysis is the first to explore the overall roles of the offsetting attraction and distraction influences of earnings news in shaping the level of attention given to the equity market by market participants. Specifically, we examine how the number of earnings announcement activity affects investor attention as measured by trading volume given to the set of non-announcing firms. We find that while earnings announcement numbers lower trading volume responses to earnings news among announcing firms (consistent with Hirshleifer et al., 2009), their distractive influence does not carry over into the market as a whole. More importantly, investor attention to both the overall market and the larger subset of non-announcing firms increase in response to earnings news activity levels. However, after decomposing the announcers as same-industry and different-industry announcers, we find that investor attention to the non-announcing segment of the market increases with the number of same-industry announcers, but actually seems to decrease (i.e. they distract attention) with the number of different-industry announcers. We also find that the associated earnings surprise brings attention to non-announcing firms (consistent with earnings news is relevant to overall market price movements). Finally, we find that distraction effects are attenuated in the financial crisis period.
Research limitations/implications
A promising area of future research is to examine the relation between market pricing efficiency and aggregate earnings activity for the set of non-announcing firms. Although it will be a challenging task to measure pricing efficiency for the non-announcers, this will complement the prior literature only focusing on the announcing segment of the market.
Practical implications
First, instead of assessing the impact of number of earnings announcements on the subset of announcing firms, which is a micro-level perspective, we identify the impact of news arrivals on all firms in the market including the vastly larger set of non-announcing firms. Second, by decomposing the number of announcements into industry-related and -unrelated news we show that different types of news arrivals spark investor attention differently, suggesting the importance of categorizing the news into related and unrelated industries.
Social implications
A potential future area of research identified by our analysis is to investigate what type of investors' attention is distracted or attracted during the earnings announcements. A promising area of future research is to examine the relation between market pricing efficiency and aggregate earnings activity for the set of non-announcing firms.
Originality/value
This paper is the first one exploring the overall roles of the offsetting attraction and distraction influences of earnings announcements in shaping the level of investor attention given to the equity market by market participants. Our findings should be of interest to investors, analysts, security market regulators and researchers.
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Vinita Dwivedi and Uttam Kumar Khedlekar
This study aims to explore the global threat of diseases that affect people, such as diarrheal, Hepatitis B, Rotavirus, Measles diseases, emphasizing the integration of disease…
Abstract
Purpose
This study aims to explore the global threat of diseases that affect people, such as diarrheal, Hepatitis B, Rotavirus, Measles diseases, emphasizing the integration of disease vaccines into immunization programs globally as recommended by the World Health Organization, resulting in significant case reductions.
Design/methodology/approach
Notably, it stresses the necessity of raising awareness about diseases and vaccines through promotional efforts alongside effective inventory management because of vaccine perishability, highlighting preservation techniques and cold storage. Addressing environmental concerns, including carbon emissions from vaccine deterioration, the study proposes green technology investments aligned with Sustainable Development Goals to mitigate these impacts. Additionally, advanced optimization algorithms, including ant colony, modified flower pollination, cuckoo search and particle swarm optimization algorithms, are used to optimize pricing, preservation strategies, green investments and replenishment schedules. The research also uses the concept of interval values to enhance the robustness of the optimization framework. Through numerical experiments, the study demonstrates the effectiveness of this dynamic investment approach, providing empirical validation.
Findings
Furthermore, sensitivity analysis on critical parameters yields valuable insights for decision-makers, underscoring the importance of dynamically managing vaccine inventory. The study offers practical solutions and managerial insights that can inform policy decisions and strategic planning in disease response efforts.
Originality/value
This study concludes by emphasizing how creative green technology approaches can help decision-makers manage the social and environmental effects of vaccine inventories in the health care of people.