News Column

Findings from University of Georgia Broaden Understanding of Accounting

June 28, 2014

By a News Reporter-Staff News Editor at Investment Weekly News -- Researchers detail new data in Accounting. According to news reporting originating from Athens, Georgia, by VerticalNews editors, the research stated, "A key assumption in many accounting and finance studies is that long horizon institutional investors are informed shareholders. Yet past empirical research finds no evidence that these institutions anticipate major corporate events, including earnings-based events."

Our news editors obtained a quote from the research from the University of Georgia, "I find that long horizon institutions are better informed in that they sell more shares of impending bankrupt firms than of matched distress firms at least one quarter ahead of bankruptcy. Share sales are greater in impending bankrupt firms whose shareholders ultimately lose all of their equity. In additional analyses, I document greater share sales by long horizon institutions with supposedly superior information processing abilities and/or access to corporate management. Share sales are significantly less in the post Regulation FD era. Overall, my findings support the validity of the common assumption that long horizon institutions are informed."

According to the news editors, the research concluded: "Regulation FD appears to mitigate (but not eliminate) their information advantage."

For more information on this research see: Evidence from impending bankrupt firms that long horizon institutional investors are informed about future firm value. Review of Accounting Studies, 2014;19(2):1009-1045. Review of Accounting Studies can be contacted at: Springer, Van Godewijckstraat 30, 3311 Gz Dordrecht, Netherlands. (Springer -; Review of Accounting Studies -

The news editors report that additional information may be obtained by contacting S. Ramalingegowda, University of Georgia, JM Tull Sch Accounting, Athens, GA 30602, United States.

Keywords for this news article include: Athens, Georgia, Accounting, United States, North and Central America

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Source: Investment Weekly News

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