Complex Disclosures And Investor Divergence At Earnings Announcements

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Degree type
Doctor of Philosophy (PhD)
Graduate group
Accounting
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Complexity
Disclosure
Innovation
Investor Divergence
Accounting
Advertising and Promotion Management
Finance and Financial Management
Marketing
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2022-09-09T20:21:00-07:00
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Park, Stella
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Abstract

I examine how complex prior disclosures influence investors’ pricing of current period earnings. To do so, I focus on firms’ disclosure of product innovations in voluntary new product announcements (NPAs) as prior complex disclosures that complement quarterly earnings releases. Using machine learning algorithms, I extract five different types of product-related information to measure NPA complexity. I find that when the complexity of prior NPAs increases, investors are more likely to differ in their abilities to use them to complement information released at the current earnings announcement, resulting in greater divergence.

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Christopher Ittner
Date of degree
2021-01-01
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