Initial Evidence on the Role of Accounting Earnings in the Bond Market
We document that: (1) the incidence of bond trade increases during the days surrounding earnings announcements, (2) there is a bond-price reaction to the announcement of earnings, and (3) there is a positive association between annual bond returns and both annual changes in earnings and annual analy...
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| Veröffentlicht in: | Journal of accounting research 2009-06, Vol.47 (3), p.721-766 |
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| container_end_page | 766 |
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| container_issue | 3 |
| container_start_page | 721 |
| container_title | Journal of accounting research |
| container_volume | 47 |
| creator | EASTON, PETER D. MONAHAN, STEVEN J. VASVARI, FLORIN P. |
| description | We document that: (1) the incidence of bond trade increases during the days surrounding earnings announcements, (2) there is a bond-price reaction to the announcement of earnings, and (3) there is a positive association between annual bond returns and both annual changes in earnings and annual analysts' forecast errors. All of these effects are larger when earnings convey bad news or when the underlying bond is more risky. Taken together, our results suggest that the nonlinear payoff structure of bond securities affects the role of accounting earnings in the bond market. |
| doi_str_mv | 10.1111/j.1475-679X.2009.00333.x |
| format | Article |
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All of these effects are larger when earnings convey bad news or when the underlying bond is more risky. Taken together, our results suggest that the nonlinear payoff structure of bond securities affects the role of accounting earnings in the bond market.</description><subject>Accounting</subject><subject>Accounting research</subject><subject>Analytical forecasting</subject><subject>Bond issues</subject><subject>Bond market</subject><subject>Bond markets</subject><subject>Bonds</subject><subject>Cash flow</subject><subject>Corporate bonds</subject><subject>Earnings</subject><subject>Earnings forecasting</subject><subject>Financial accounting</subject><subject>Financial bonds</subject><subject>Financing methods</subject><subject>Investment grade bonds</subject><subject>Junk bonds</subject><subject>Pay-off</subject><subject>Securities markets</subject><subject>Studies</subject><subject>Trade</subject><issn>0021-8456</issn><issn>1475-679X</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2009</creationdate><recordtype>article</recordtype><sourceid>X2L</sourceid><recordid>eNqNUctu2zAQFIoWqJv2EwoIPfQmhU9ROvTgBs4LTlMECZIbQVGrhqosuqSc2n-fdRT40FMJDHeBnRksh0mSUpJTPMddToWSWaGqh5wRUuWEcM7z7Ztkdhi8TWaEMJqVQhbvkw8xdgSZktNZcnoxuNGZPl08uQYGC6kf0vER0hvfY9-mc2v9Zhjd8CtdmDBgjambKN_90KRXJvyG8WPyrjV9hE-v9Si5O13cnpxny-uzi5P5MrMFlTwzRDasYrzGi9VlS1UDlhdMqsrapoJSEsOIAiFbEMLIGmoJTFhDoATOFT9Kvk6-6-D_bCCOeuWihb43A_hN1FxRIfGtSPzyD7HzmzDgbpqRQrFKCoqkciLZ4GMM0Op1cCsTdpoSvU9Xd3ofot6HqPfp6pd09Rall5M0wBrsQVf3pvMmQNRPmhuh8NohXqTcOARHrBGKUa2KQj-OKzT7Npn9dT3s_nsJfXk9v8EO9Z8nfRdHHw56JqUoCa9wnk1zF0fYHub4c2jK0fr-x5kWPx-Wy4pe6Vv-DO3isN8</recordid><startdate>200906</startdate><enddate>200906</enddate><creator>EASTON, PETER D.</creator><creator>MONAHAN, STEVEN J.</creator><creator>VASVARI, FLORIN P.</creator><general>Blackwell Publishing Inc</general><general>Blackwell Publishing</general><general>Wiley Blackwell</general><general>Blackwell Publishing Ltd</general><scope>BSCLL</scope><scope>DKI</scope><scope>X2L</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>8BJ</scope><scope>FQK</scope><scope>JBE</scope></search><sort><creationdate>200906</creationdate><title>Initial Evidence on the Role of Accounting Earnings in the Bond Market</title><author>EASTON, PETER D. ; MONAHAN, STEVEN J. ; VASVARI, FLORIN P.</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c6153-a05d2923b2922b8f17dec362579ccd9e850a207e45fe44a5beb5e24ca0e8e3373</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2009</creationdate><topic>Accounting</topic><topic>Accounting research</topic><topic>Analytical forecasting</topic><topic>Bond issues</topic><topic>Bond market</topic><topic>Bond markets</topic><topic>Bonds</topic><topic>Cash flow</topic><topic>Corporate bonds</topic><topic>Earnings</topic><topic>Earnings forecasting</topic><topic>Financial accounting</topic><topic>Financial bonds</topic><topic>Financing methods</topic><topic>Investment grade bonds</topic><topic>Junk bonds</topic><topic>Pay-off</topic><topic>Securities markets</topic><topic>Studies</topic><topic>Trade</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>EASTON, PETER D.</creatorcontrib><creatorcontrib>MONAHAN, STEVEN J.</creatorcontrib><creatorcontrib>VASVARI, FLORIN P.</creatorcontrib><collection>Istex</collection><collection>RePEc IDEAS</collection><collection>RePEc</collection><collection>CrossRef</collection><collection>International Bibliography of the Social Sciences (IBSS)</collection><collection>International Bibliography of the Social Sciences</collection><collection>International Bibliography of the Social Sciences</collection><jtitle>Journal of accounting research</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>EASTON, PETER D.</au><au>MONAHAN, STEVEN J.</au><au>VASVARI, FLORIN P.</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Initial Evidence on the Role of Accounting Earnings in the Bond Market</atitle><jtitle>Journal of accounting research</jtitle><date>2009-06</date><risdate>2009</risdate><volume>47</volume><issue>3</issue><spage>721</spage><epage>766</epage><pages>721-766</pages><issn>0021-8456</issn><eissn>1475-679X</eissn><coden>JACRBR</coden><abstract>We document that: (1) the incidence of bond trade increases during the days surrounding earnings announcements, (2) there is a bond-price reaction to the announcement of earnings, and (3) there is a positive association between annual bond returns and both annual changes in earnings and annual analysts' forecast errors. 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| ispartof | Journal of accounting research, 2009-06, Vol.47 (3), p.721-766 |
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| language | eng |
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| source | Jstor Complete Legacy; RePEc; Wiley Online Library Journals Frontfile Complete |
| subjects | Accounting Accounting research Analytical forecasting Bond issues Bond market Bond markets Bonds Cash flow Corporate bonds Earnings Earnings forecasting Financial accounting Financial bonds Financing methods Investment grade bonds Junk bonds Pay-off Securities markets Studies Trade |
| title | Initial Evidence on the Role of Accounting Earnings in the Bond Market |
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