Within-industry timing of earnings warnings: do managers herd?

Within-industry timing of earnings warnings: do managers herd? An earnings surprise can be caused by a combination of firm-specific factors and market or industry factors. We hypothesize that managers have an incentive to time their warnings to occur soon after their industry peers’ warnings to minimize their apparent responsibility for earnings shortfalls. Using duration analysis, we find that firms accelerate their warnings in response to peer firms’ warnings. We conduct several tests to control for alternative explanations for warning clustering (for example, common shocks and information transfer) and conclude that the observed clustering is primarily due to herding. Our study is one of the first to empirically examine managers’ herding behavior and the first to document clustering of bad news. Moreover, we provide a multi-firm perspective on managers’ disclosure decisions that alerts researchers to consider or control for herding when they examine other determinants of managers’ disclosure decisions. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Accounting Studies Springer Journals

Within-industry timing of earnings warnings: do managers herd?

Loading next page...
Springer US
Copyright © 2009 by Springer Science+Business Media, LLC
Business and Management; Accounting/Auditing; Corporate Finance; Public Finance
Publisher site
See Article on Publisher Site


  • Does earnings guidance affect market returns? The nature and information content of aggregate earnings guidance
    Anilowski, C; Feng, M; Skinner, D
  • Using disclosure to influence herd behavior and alter competition
    Arya, A; Mittendorf, B
  • Voluntary causal disclosures: Tendencies and capital market reaction
    Baginski, SP; Hassell, J; Hillison, WA
  • Further evidence on nontrading-period information release
    Baginski, SP; Hassell, J; Pagach, D
  • Learning from the behavior of others: Conformity, fads, and informational cascades
    Bikhchandani, S; Hirshleifer, D; Welch, I
  • CEO compensation, director compensation, and firm performance: Evidence of cronyism?
    Brick, IE; Palmon, O; Wald, JK
  • Financial analyst characteristics and herding behavior in forecasting
    Clement, M; Tse, S

You’re reading a free preview. Subscribe to read the entire article.

DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 12 million articles from more than
10,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Unlimited reading

Read as many articles as you need. Full articles with original layout, charts and figures. Read online, from anywhere.

Stay up to date

Keep up with your field with Personalized Recommendations and Follow Journals to get automatic updates.

Organize your research

It’s easy to organize your research with our built-in tools.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

Monthly Plan

  • Read unlimited articles
  • Personalized recommendations
  • No expiration
  • Print 20 pages per month
  • 20% off on PDF purchases
  • Organize your research
  • Get updates on your journals and topic searches


Start Free Trial

14-day Free Trial

Best Deal — 39% off

Annual Plan

  • All the features of the Professional Plan, but for 39% off!
  • Billed annually
  • No expiration
  • For the normal price of 10 articles elsewhere, you get one full year of unlimited access to articles.



billed annually
Start Free Trial

14-day Free Trial