Quarterly Earnings Informativeness and Information Asymmetry

Abstract

Effectiveness of the earnings reporting process as one of the most important elements of shareholders' decision making depends on the information extent this process provides for the capital market. Elements such as information asymmetry and news in the company have impact on earnings reporting process and its earnings informativeness. The main objective of this study is to analyze the impact of information asymmetry and bad news on quarterly Earnings Informativeness of firms listed in Tehran Stock Exchange. The sample consists of 75 firms listed in Tehran Stock Exchange during the period from 2010 to 2015 and the hypothesis is tested using the panel fixed effects regression method. The results indicate that an increase in information asymmetry and bad news at the end of a quarter has a positive significant effect on the Earnings Informativeness of that quarter.

Keywords

• Voluntary Disclosure incentives
• Earnings Informativeness
• Information Asymmetry
• Bad News