The Effect of Earnings Announcement Distraction on Individual Trading Behaviour: An Attention-based Hypothesis
| dc.contributor.author | Sultan, Ameer Gakhar | |
| dc.date.accessioned | 2018-04-30T02:41:30Z | |
| dc.date.available | 2018-04-30T02:41:30Z | |
| dc.date.issued | 2017 | |
| dc.description.abstract | Research has shown that trading decisions by individual investors are influenced by behavioural factors such as attention effects. The literature examining the effects of attention on individual trading behaviour measures attention using proxies such as abnormal trading volume and stocks covered in the media. These proxies do not separate the effect of trading due to changing fundamentals from attention-based trading. I use the distraction caused by earning announcements to study the effect of attention on individual trading behaviour. Consistent with the literature, I find that investors net buy stocks with extreme positive and extreme negative earnings. However, this result is only significant when investors are most attentive (least distracted); that is, on days when the number of competing announcements is low. On high distraction days when investors make the wrong trading decision initially, they amend their prior trading decision after a lag (delayed reaction) when they eventually observe the true earnings of the stock. The most active investors amend this prior trading decision before relatively nonactive investors do. The delayed reaction by active investors is not portrayed for stocks with no analyst coverage, as evident in consistent net buying. The results remain robust even if surprise is measured using analyst forecasts; announcement distractions are limited to announcements in similar or very different industries. | en_AU |
| dc.identifier.other | b49661498 | |
| dc.identifier.uri | http://hdl.handle.net/1885/142899 | |
| dc.language.iso | en | en_AU |
| dc.subject | Earnings Announcement | en_AU |
| dc.subject | Behavioural Bias | en_AU |
| dc.subject | Trading | en_AU |
| dc.subject | Surprise Unexpected Earnings | en_AU |
| dc.title | The Effect of Earnings Announcement Distraction on Individual Trading Behaviour: An Attention-based Hypothesis | en_AU |
| dc.type | Thesis (MPhil) | en_AU |
| dcterms.valid | 2018 | en_AU |
| local.contributor.affiliation | College of Business and Economics, The Australian National University | en_AU |
| local.contributor.authoremail | ameer.sultan@anu.edu.au | en_AU |
| local.contributor.supervisor | Zhu, Qiaoqiao | |
| local.contributor.supervisorcontact | qiaoqiao.zhu@anu.edu.au | en_AU |
| local.description.notes | the author deposited 30/04/17 | en_AU |
| local.identifier.doi | 10.25911/5d67b414d7947 | |
| local.mintdoi | mint | |
| local.type.degree | Master of Philosophy (MPhil) | en_AU |