Evidence on the Incremental Information Content of Additional Firm Disclosures Made Concurrently with Earnings

Abstract

The purpose of this study is to assess the incremental information content of additional firm disclosures released concurrently with the announcement of annual earnings. More specifically, we examine the Dow Jones News Retrieval Service for all disclosures made by sample firms over a two-trading-day window commencing with the trading day on which a firm's annual earnings announcement appears. As described later in greater detail, these disclosures include components of earnings, dividend announcements, qualitative comments by officers, operating data such as order backlogs and capital spending, announcement of stock splits, and more. By incremental information content we mean information content beyond that contained in the announcement of earnings per se. We measure information content in the form of a statistically significant association between categorical and continuous disclosure