Rivals’ Negative Earnings Surprises, Language Signals, and Firms’ Competitive Actions

Wei Guo (First Author), Tieying Yu (Participant Author), Metin Sengul (Participant Author)

科研成果: 期刊稿件期刊论文

29 引用 (Web of Science)

摘要

Research in competitive dynamics has primarily analyzed how characteristics of observable attacks influence firms’ competitive responses. Why and how firms take action in response to critical events that affect their rivals, without being attacked themselves, is less well understood. Focusing on negative earnings surprises, we argue that a focal firm is likely to view a rival’s negative earnings surprise as an opportunity to exploit its vulnerability. Therefore, such surprises are positively associated with the intensity of competitive actions initiated by a focal firm. Furthermore, the complexity and vagueness of a rival’s language in an earnings conference call strengthens the positive relationship between the negative earnings surprise and the focal firm’s intensity of competitive actions. We tested our arguments using data from 3,202 earnings releases and conferences calls of publicly listed firms between 2003 and 2014 in the United States. The results and robustness checks support our predictions.
源语言英语
页(从-至)637-659
期刊Academy of Management Journal
63
3
DOI
已出版 - 2020

Corresponding author email

weivivian.guo@ceibs.edu

Project sponsor

Other

Project name

Research Grants Council of Hong Kong’s General Research Fund

Project No.

PolyU 255060/15B

关键词

  • competitive dynamics
  • earnings surprise
  • language signals
  • strategic communication

成果物的来源

  • FT
  • ABDC-A*
  • Scopus
  • SSCI

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