Major determinants of Interim Disclosures in an Emerging Market

An interim financial reporting protocol became mandatory in Finland as recently as calendar year 1986. This makes the Helsinki Stock Exchange an excellent forum for the investigation of the determinants of periodic reporting in present day European conditions. It is hypothesized that the level of disclosure should be a function of a firm\u27s: governance structure, business risk, market risk, capital structure, stock price adjustment, growth, growth potential and size. As predicted, Finnish interim disclosure over the period 1985 to 1993 is directly related to the quantitative measures of business risk, capital structure, size and market maturity. One other hypothesis is confirmed. Governance is found to be inversely related to disclosure, suggesting that, the greater the institutional concentration of ownership of Finnish firms by other firms, the lower the degree of interim disclosure

Bimodality In Interim Reports: An Analysts' View

Cumulative abnormal residuals (cars) show how markets adjust to published information. Theoretically, cars are assumed to display unit normal behavior.  Despite its merits, car has proved to be a somewhat imprecise measure of market response to published information.  In practice, cars exhibit considerable deviation from theoretical unit normal behavior. Three disparities between theory and practice can be pinpointed.  These are car: (1) location, (2) shape, and (3) stability.  In our previous work we have demonstrated that cars are often bimodally distributed.  This finding shows one reason why it takes semistrong efficient markets some time to digest new information. Cars, for the time period during which markets analyze the new value determining data, are usually bimodally distributed. One mode of the distribution represents the impact of good news. The other peak is caused by bad news.  The valley, between the two peaks, indicates the influence of neutral news.  This paper analyzes the interim reports, which constitute the data for our previous related studies. This research identifies the type of new information that creates bimodal cars

An Analysis of the Impact of Varying Levels of Interim Disclosure on Finnish Share Prices within Five Days of the Announcement

This research examines the relationship between interim reports submitted to the Helsinki Exchanges and the share prices of reporting firms over the over the period 1985-93. The purpose of this investigation is to determine the differences in magnitude and timing of price changes associated with three levels of voluntary disclosure: (1) less-than expected, (2) about-as expected and (3) greater-than expected. The findings are that price adjustments begin on the announcement day for firms that report in magnitudes about-as expected. The share prices initially rise above the association period value, confirming DeBondt & Thaler (1985). Then, share prices decline to the association period value, confirming Daniel, Hirshleifer & Subrahmanyam (1998). This helps resolve an apparent empirical conflict. The reaction is delayed by one day for firms reporting in less-than expected amounts. The market reaction is delayed three days for firms reporting in greater-than expected magnitudes. This provides the additional insight that the amount of interim information disclosed matters to the investor: a finding that contradicts the efficient markets hypothesis (Fama, 1970). This research is concerned with the magnitude of reporting, only. Further insights may be gained in subsequent research focusing on the quality of the reports