Nonfinancial 8-K disclosures and individual investors' trading during earnings announcement window

IF 1.8 Q2 BUSINESS, FINANCE International Journal of Managerial Finance Pub Date : 2024-08-13 DOI:10.1108/ijmf-07-2023-0341

Jinglin Jiang, Weiwei Wang

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Abstract

Purpose

This study investigates the influence of nonfinancial 8-K disclosures released during the earnings announcement window on the abnormal trading activities of individual investors.

Design/methodology/approach

We employ regression analysis in this empirical study to examine the impact of nonfinancial 8-K filings on individual investors' abnormal trading activities.

Findings

Our results reveal that individual investors exhibit higher levels of abnormal trading activities when firms release nonfinancial 8-Ks during the (0,1) window of earnings announcements. This effect is observed for both buyer-initiated and seller-initiated transactions and is particularly pronounced for firms reporting an operating loss. Negative sentiment in 8-Ks significantly intensifies such effect. Additionally, we find that buy-sell consensus increases significantly with concurrent nonfinancial 8-Ks. This suggests that 8-Ks may reduce information noise, leading individuals to trade with greater conviction.

Originality/value

Our study examines the joint influence of nonfinancial 8-Ks and earnings announcements on individual investors' trading activities, thereby providing a novel perspective on the mechanisms through which 8-K filings affect individual investors' trading behaviors.

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非财务信息 8-K 披露与个人投资者在财报公布窗口期的交易

本研究探讨了在盈利公告窗口期发布的非财务 8-K 披露信息对个人投资者异常交易活动的影响。研究结果我们的研究结果显示，当公司在盈利公告窗口期（0,1）发布非财务 8-K 文件时，个人投资者的异常交易活动水平较高。买方发起的交易和卖方发起的交易都存在这种效应，尤其是报告经营亏损的公司。8-K 中的负面情绪会明显加剧这种效应。此外，我们还发现，买方与卖方的共识会随着同时发布非财务类 8-Ks 而显著增加。我们的研究探讨了非财务 8-K 和盈利公告对个人投资者交易活动的共同影响，从而为 8-K 文件影响个人投资者交易行为的机制提供了一个新的视角。

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来源期刊

International Journal of Managerial Finance BUSINESS, FINANCE-

CiteScore

4.10

自引率

0.00%

发文量

期刊介绍： Treasury and Financial Risk Management ■Redefining, measuring and identifying new methods to manage risk for financing decisions ■The role, costs and benefits of insurance and hedging financing decisions ■The role of rating agencies in managerial decisions Investment and Financing Decision Making ■The uses and applications of forecasting to examine financing decisions measurement and comparisons of various financing options ■The public versus private financing decision ■The decision of where to be publicly traded - including comparisons of market structures and exchanges ■Short term versus long term portfolio management - choice of securities (debt vs equity, convertible vs non-convertible)