Title

The transmission of corporate financial information across national borders and equity market linkages

Document Type

Journal article

Source Publication

Review of Accounting Studies

Publication Date

12-1-1996

Volume

1

Issue

4

First Page

309

Last Page

337

Keywords

Spillover effects

Abstract

Although intra-industry earnings information transfers have been documented within individual nations, little or no attention has been given to examining whether these transfers also exist across national boundaries. This study sets out to investigate the issue by analyzing the abnormal stock market returns of British firms at the time of annual earnings announcements by U.S. corporations and the returns of U.S. firms at the time of profit announcements by British companies. Information transfers are also tested by examining whether earnings surprises of companies in one country are related to revisions in investment analysts' consensus profit forecasts of non-reporting firms in the other country. The accuracies of revisions in consensus earnings estimates an investigated. Evidence of transnational information transfers from the United States to Britain is found and the degree and level of the signal is related to various firm and industry characteristics including correlations in reported profits.

DOI

10.1007/BF00570835

Print ISSN

13806653

E-ISSN

15737136

Publisher Statement

Copyright © 1996 Kluwer Academic Publishers, Boston

Access to external full text or publisher's version may require subscription.

Full-text Version

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Recommended Citation

Firth, M. (1996). The transmission of corporate financial information across national borders and equity market linkages. Review of Accounting Studies, 1(4), 309-337. doi: 10.1007/BF00570835