Do managers withhold bad news

S. P. Kothari, Susan Shu, Peter Wysocki

Research output: Contribution to journalArticle

403 Citations (Scopus)

Abstract

In this study, we examine whether managers delay disclosure of bad news relative to good news. If managers accumulate and withhold bad news up to a certain threshold, but leak and immediately reveal good news to investors, then we expect the magnitude of the negative stock price reaction to bad news disclosures to be greater than the magnitude of the positive stock price reaction to good news disclosures. We present evidence consistent with this prediction. Our analysis suggests that management, on average, delays the release of bad news to investors. Copyright;

Original languageEnglish (US)
Pages (from-to)241-276
Number of pages36
JournalJournal of Accounting Research
Volume47
Issue number1
DOIs
StatePublished - Mar 2009
Externally publishedYes

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Managers
News
Disclosure
Investors
Stock price reaction
Prediction

ASJC Scopus subject areas

  • Finance
  • Accounting
  • Economics and Econometrics

Cite this

Do managers withhold bad news. / Kothari, S. P.; Shu, Susan; Wysocki, Peter.

In: Journal of Accounting Research, Vol. 47, No. 1, 03.2009, p. 241-276.

Research output: Contribution to journalArticle

Kothari, SP, Shu, S & Wysocki, P 2009, 'Do managers withhold bad news', Journal of Accounting Research, vol. 47, no. 1, pp. 241-276. https://doi.org/10.1111/j.1475-679X.2008.00318.x
Kothari, S. P. ; Shu, Susan ; Wysocki, Peter. / Do managers withhold bad news. In: Journal of Accounting Research. 2009 ; Vol. 47, No. 1. pp. 241-276.
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