Inter-industry network structure and the cross-predictability of earnings and stock returns

Autor:	Judson Caskey, N. Bugra Ozel, Daniel Aobdia
Rok vydání:	2014
Předmět:	Corporate finance Information transfer Earnings Accounting Systematic risk Economics Diversification (finance) Monetary economics Predictability General Business Management and Accounting Stock (geology) Public finance
Zdroj:	Review of Accounting Studies. 19:1191-1224
ISSN:	1573-7136 1380-6653
Popis:	We examine how the patterns of inter-industry trade flows impact the transfer of information and economic shocks. We provide evidence that the intensity of transfers depends on industries’ positions within the economy. In particular, some industries occupy central positions in the flow of trade, serving as hubs. Consistent with a diversification effect, we find that these industries’ returns depend relatively more on aggregate risks than do returns of noncentral industries. Analogously, we find that the accounting performance of central industries associates more strongly with macroeconomic measures than does the accounting performance of noncentral industries. Comparing central industries to noncentral ones, we find that the stock returns and accounting performance of central industries better predict the performance of industries linked to them. This suggests that shocks to central industries propagate more strongly than shocks to other industries. Our results highlight how industries’ positions within the economy affect the transfer of information and economic shocks.
Databáze:	OpenAIRE
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::0ce29a1897bf024fc8d97b71a300378b https://doi.org/10.1007/s11142-014-9286-7 Zobrazit plný text záznamu Plný text ve formátu PDF