Investor Attention and Corporate Disclosure Timing: Evidence from Korea

Abstract

This paper investigates the association between investor attention and the timing of the release of corporate information in the Korean stock market. The association provides the evidence on whether the investor demand for earnings information affects the managerial disclosure decision. Similar to a previous study that uses the Google Search Volume Index to measure investor attention, this paper re-measures investor attention using the Search Volume Index provided by Naver, which has the largest market share of all internet search portals in Korea. Using 9,526 firm-quarter observations, the paper regresses disclosure timing on investor attention. Empirical results show that managers facing greater investor attention announce quarterly earnings information on an earlier date than in the previous year, and they release earnings information during trading hours rather than non-trading hours. The findings indicate that managers consider timely disclosure to be an important factor in meeting investor interests. In addition, this paper sheds light on the role of individual/retail investors in managerial disclosure decisions, considering that the measure of investor attention primarily captures individual/retail investor interest.