TY - JOUR
T1 - Relative performance evaluation and the timing of earnings release
AU - Gong, Guojin
AU - Li, Laura Yue
AU - Yin, Huifang
N1 - Funding Information:
We are grateful for helpful comments from Mark Bagnoli, Mary Ellen Carter, Dan Givoly, Wayne Guay (the Editor), Iny Hwang, Rick Mergenthaler, Dhananjay Nanda, Mort Pincus, Shiva Rajgoapal, Frances Tice, David Tsui (the Referee), Mohan Venkatachalam, Susan Watts, and workshop participants at University of Illinois at Urbana-Champaign, University of Iowa, University of Purdue, Shanghai University of Finance and Economics, 2017 Utah Winter Conference, 2017 AAA annual meeting, 2017 APMAA conference and MAS 2018 Mid-year Conference for helpful comments. Laura Li gratefully acknowledges financial support from the PricewaterhouseCoopers Faculty Fellowship at the University of Illinois at Urbana-Champaign. Huifang Yin acknowledges the financial support from the MOE project of Key Research Institute of Humanities and Social Science in University (No. 15JJD630008).
Funding Information:
We are grateful for helpful comments from Mark Bagnoli, Mary Ellen Carter, Dan Givoly, Wayne Guay (the Editor), Iny Hwang, Rick Mergenthaler, Dhananjay Nanda, Mort Pincus, Shiva Rajgoapal, Frances Tice, David Tsui (the Referee), Mohan Venkatachalam, Susan Watts, and workshop participants at University of Illinois at Urbana-Champaign, University of Iowa, University of Purdue, Shanghai University of Finance and Economics, 2017 Utah Winter Conference, 2017 AAA annual meeting, 2017 APMAA conference and MAS 2018 Mid-year Conference for helpful comments. Laura Li gratefully acknowledges financial support from the PricewaterhouseCoopers Faculty Fellowship at the University of Illinois at Urbana-Champaign. Huifang Yin acknowledges the financial support from the MOE project of Key Research Institute of Humanities and Social Science in University (No. 15JJD630008).? We are grateful for helpful comments from Mark Bagnoli, Mary Ellen Carter, Dan Givoly, Wayne Guay (the Editor), Iny Hwang, Rick Mergenthaler, Dhananjay Nanda, Mort Pincus, Shiva Rajgoapal, Frances Tice, David Tsui (the Referee), Mohan Venkatachalam, Susan Watts, and workshop participants at University of Illinois at Urbana-Champaign, University of Iowa, University of Purdue, Shanghai University of Finance and Economics, 2017 Utah Winter Conference, 2017 AAA annual meeting, 2017 APMAA conference and MAS 2018 Mid-year Conference for helpful comments. Laura Li gratefully acknowledges financial support from the PricewaterhouseCoopers Faculty Fellowship at the University of Illinois at Urbana-Champaign. Huifang Yin acknowledges the financial support from the MOE project of Key Research Institute of Humanities and Social Science in University (No. 15JJD630008).
Publisher Copyright:
© 2019 Elsevier B.V.
PY - 2019/4/1
Y1 - 2019/4/1
N2 - Relative performance evaluation (RPE) compensates managers on their relative performance against a peer group. Since observing more peers’ performance allows managers to better estimate the performance level required to achieve RPE targets, we conjecture that releasing earnings later than peers facilitates managers to achieve targets by exploiting last-minute reporting discretion. Empirical evidence is consistent with our conjecture. Further, managers tend to select peers that release earnings more timely and delay own firms’ earnings releases to be later than peers’ after RPE adoption. Our evidence suggests strategic timing of earnings release and discretionary reporting in response to relative performance evaluation.
AB - Relative performance evaluation (RPE) compensates managers on their relative performance against a peer group. Since observing more peers’ performance allows managers to better estimate the performance level required to achieve RPE targets, we conjecture that releasing earnings later than peers facilitates managers to achieve targets by exploiting last-minute reporting discretion. Empirical evidence is consistent with our conjecture. Further, managers tend to select peers that release earnings more timely and delay own firms’ earnings releases to be later than peers’ after RPE adoption. Our evidence suggests strategic timing of earnings release and discretionary reporting in response to relative performance evaluation.
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UR - http://www.scopus.com/inward/citedby.url?scp=85062902015&partnerID=8YFLogxK
U2 - 10.1016/j.jacceco.2019.03.002
DO - 10.1016/j.jacceco.2019.03.002
M3 - Article
AN - SCOPUS:85062902015
VL - 67
SP - 358
EP - 386
JO - Journal of Accounting and Economics
JF - Journal of Accounting and Economics
SN - 0165-4101
IS - 2-3
ER -