Implications of limited investor attention to customer–supplier information transfers

نویسنده

  • Hui Zhu
چکیده

This study focuses on the market reaction to information transfers from economically linked customers. I examine whether investors have limited attention with respect to the information contained in customer earnings announcements for suppliers. Using 1083 unique customer–supplier relationships for the period 1983–2011, I find that the cumulative abnormal returns of a supplier surrounding and following linked customers’ earnings announcements are positively related to the earnings information of the customers, suggesting that customer earnings announcements convey information to suppliers. I also find that the post-earnings announcement drift in customers contributes to the cross-firm reaction, and the predictability of customer earnings surprises for suppliers’ future returns is not entirely due to limited investor attention. © 2014 The Board of Trustees of the University of Illinois. Published by Elsevier B.V. All rights reserved.

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تاریخ انتشار 2015