Abstract
This study begins to verify whether delayed informed trades occur surrounding an earnings release. Next, we discover that post-event investor opinions tend to diverge when more informed trades are delayed after the earnings release. As additional empirical evidence indicates, investors are likely compelled to postpone their informed trades due to information complexity, stock illiquidity, and institutional competition. Finally, such a documented association between delayed informed trades and opinion divergence remains robust to the placebo test, endogeneity problem, and large-cap sample bias.
| Original language | English |
|---|---|
| Pages (from-to) | 4556-4574 |
| Number of pages | 19 |
| Journal | International Journal of Finance and Economics |
| Volume | 27 |
| Issue number | 4 |
| Early online date | 16 Dec 2020 |
| DOIs | |
| Publication status | Published - Oct 2022 |
| Externally published | Yes |
Bibliographical note
Publisher Copyright:© 2020 John Wiley & Sons, Ltd.
Funding
Multi‐Year Research Grant, Grant/Award Number: MYRG2020‐00042‐FBA Funding information
Keywords
- delayed informed trades
- information complexity
- institutional competition
- opinion divergence
- stock illiquidity