| Journal of Economics and Management Volume 17, No. 1 March, 2021 |
| Response to Unexpected Earnings and the 52-Week-High Anchoring |
| Yu-Hsiu Lin |
| Department of Finance and Information, Kaohsiung University of Science and Technology, Taiwan |
| Min Han Wu |
| Department of Finance and Information, Kaohsiung University of Science and Technology, Taiwan |
| Abstract |
| We examine post-earnings-announcement drift (PEAD) in the Taiwan stock market and analyze its relationship with the 52-week-high anchoring. The empirical results are as follows: First, unexpected earnings positively affect subsequent abnormal returns, whereas the proximity of a stock price to its 52-week high negatively influences subsequent abnormal returns. Second, the magnitude of subsequent abnormal returns in response to unexpected earnings is decreased when the current stock price is near its 52-week high. Finally, we reveal that a high level of foreign institutional investor ownership can mitigate the PEAD effect. However, the PEAD effect is strengthened in the subsample with high board director ownership. |
| Keywords：Unexpected Earnings, Post-Earnings-Announcement Drift, 52-Week-High Anchoring. |
| JEL Classifications：G14, G40. |
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