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- Publisher Website: 10.1016/j.jaccpubpol.2013.08.001
- Scopus: eid_2-s2.0-84887164899
- WOS: WOS:000327565400001
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Article: Short sale constraints, heterogeneous interpretations, and asymmetric price reactions to earnings announcements
Title | Short sale constraints, heterogeneous interpretations, and asymmetric price reactions to earnings announcements |
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Authors | |
Issue Date | 2013 |
Publisher | Elsevier Inc. The Journal's web site is located at http://www.elsevier.com/locate/jaccpubpol |
Citation | Journal of Accounting and Public Policy, 2013, v. 32 n. 6, p. 435-455 How to Cite? |
Abstract | This study tests Miller's (1977) overpricing hypothesis from a new angle. Specifically, we investigate the effects of heterogeneous interpretations on price reactions to earnings announcements. We find that the difference between good news and bad news earnings response coefficients increases with the degree of heterogeneous interpretations in the presence of short sale constraints. This pattern is more pronounced when short sale constraints are more binding. These findings support the notion that, under short sale constraints, stock prices selectively incorporate more optimistic opinions rather than the average opinion of all investors. Therefore, reducing short sale constraints should facilitate price discovery and improve price efficiency. This study complements recent studies examining the joint effect of short sale constraints and ex ante opinion divergence on price reactions to earnings announcements. |
Persistent Identifier | http://hdl.handle.net/10722/193380 |
ISSN | 2021 Impact Factor: 3.629 2020 SCImago Journal Rankings: 1.264 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Chang, EC | en_US |
dc.contributor.author | Xu, J | en_US |
dc.contributor.author | Zheng, L | en_US |
dc.date.accessioned | 2013-12-20T03:03:19Z | - |
dc.date.available | 2013-12-20T03:03:19Z | - |
dc.date.issued | 2013 | en_US |
dc.identifier.citation | Journal of Accounting and Public Policy, 2013, v. 32 n. 6, p. 435-455 | en_US |
dc.identifier.issn | 0278-4254 | - |
dc.identifier.uri | http://hdl.handle.net/10722/193380 | - |
dc.description.abstract | This study tests Miller's (1977) overpricing hypothesis from a new angle. Specifically, we investigate the effects of heterogeneous interpretations on price reactions to earnings announcements. We find that the difference between good news and bad news earnings response coefficients increases with the degree of heterogeneous interpretations in the presence of short sale constraints. This pattern is more pronounced when short sale constraints are more binding. These findings support the notion that, under short sale constraints, stock prices selectively incorporate more optimistic opinions rather than the average opinion of all investors. Therefore, reducing short sale constraints should facilitate price discovery and improve price efficiency. This study complements recent studies examining the joint effect of short sale constraints and ex ante opinion divergence on price reactions to earnings announcements. | - |
dc.language | eng | en_US |
dc.publisher | Elsevier Inc. The Journal's web site is located at http://www.elsevier.com/locate/jaccpubpol | en_US |
dc.relation.ispartof | Journal of Accounting and Public Policy | en_US |
dc.title | Short sale constraints, heterogeneous interpretations, and asymmetric price reactions to earnings announcements | en_US |
dc.type | Article | en_US |
dc.identifier.email | Chang, EC: ecchang@business.hku.hk | en_US |
dc.identifier.authority | Chang, EC=rp01050 | en_US |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.1016/j.jaccpubpol.2013.08.001 | - |
dc.identifier.scopus | eid_2-s2.0-84887164899 | - |
dc.identifier.hkuros | 227062 | en_US |
dc.identifier.volume | 32 | en_US |
dc.identifier.issue | 6 | en_US |
dc.identifier.spage | 435 | en_US |
dc.identifier.epage | 455 | en_US |
dc.identifier.isi | WOS:000327565400001 | - |
dc.publisher.place | United States | - |
dc.identifier.issnl | 0278-4254 | - |