סמינר במימון חשבונאות

Doron Israeli,  IDC 

We investigate whether and to what extent distractions affect investors' reactions to firm announcements.

We use a daily news pressure index as a proxy for the presence of potential investor distraction.

Since breaking news captured by this index is largely unpredictable and unrelated to investors' valuation

decisions, our research design offers a unique opportunity to examine investor attention in the absence of

strategic timing of announcements by managers. We examine a broad set of corporate announcements

to further explore how investor attention varies with announcement type. Using overall trading and Google search

volume as measures of investor attention, we find that investors are susceptible to distraction in their reactions

to corporate announcements. Our findings also reveal that investor attention varies with announcement

type and that retail investors are particularly susceptible to distractions.