What drives the increased informativeness of earnings announcements over time?

Daniel W. Collins, Oliver Zhen Li, Hong Xie

Research output: Contribution to journalArticlepeer-review

52 Scopus citations


Landsman and Maydew (J Acc Res 40:797-808, 2002) document that the information content of earnings announcements has increased over the past three decades, and Francis et al. (Acc Rev, 77:515-546, 2002) conclude that expanded concurrent disclosures in firms' earnings announcements, especially the inclusion of detailed income statements, explain this increase. We posit and find that the temporal increase in the intensity of the market's reaction to Street earnings offers a competing explanation for the Landsman and Maydew finding. We also find that expanded concurrent disclosure of GAAP-based information contributes to the temporal increase in the information content of earnings announcements. However, unlike Francis et al., we find that the temporal increase in concurrent balance sheet and cash flow statement information dominates concurrent income statement information once we control for Street earnings.

Original languageEnglish
Pages (from-to)1-30
Number of pages30
JournalReview of Accounting Studies
Issue number1
StatePublished - Mar 2009

Bibliographical note

Funding Information:
Acknowledgements We gratefully acknowledge the helpful comments and suggestions made by Russell Lundholm (the editor), an anonymous referee, Paul Beck, Brian Cloyd, Rajib Doogar, Neil Fargher, Susan Krische, Jeff Miller, James Myers, Theodore Sougiannis, Martin Wu, David Ziebart, and workshop participants at University of Illinois at Urbana-Champaign. We thank Thomson Financial for providing analyst forecast data through the Institutional Brokers Estimate System (I/B/E/S). Dan Collins and Hong Xie thank the Department of Accounting at the University of Iowa and the Department of Accountancy at the University of Illinois at Urbana-Champaign, respectively, for financial support.


  • Abnormal returns
  • GAAP earnings
  • Information content
  • Return volatility
  • Street earnings
  • Trading volume

ASJC Scopus subject areas

  • Accounting
  • Business, Management and Accounting (all)


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