"The informativeness of earnings announcements during times of global uncertainty: Evidence from the Covid-19 pandemic"

Authors:
Michele Fabrizi - Department of Economics and Management, University of Padua
Elisabetta Ipino - Albers School of Business and Economics, Seattle University
Federico Longhin - Department of Economics and Management, University of Padua
Antonio Parbonetti - Department of Economics and Management, University of Padua

This study, published in Corporate Governance: an International Review, shows how investors assessed the informativeness of earnings announcements during the Covid-19 pandemic. Previous studies suggest that earnings announcements are more likely to provide value to investors in times of heightened uncertainty. However, the massive regulatory intervention that occurred during the pandemic likely led investors to seek alternative sources of information and reduce their reliance on earnings to value stocks.
The empirical findings show that earnings announcements lost part of their information content during the Covid-19 crisis. The authors also find that the loss of information in earnings announcements is due to exposure to the pandemic.

Read the full article here