@article {Lung27, author = {Peter P. Lung and Sergiy Saydometov and Mohammad Riaz Uddin}, title = {Is Limited Attention Universal? Evidence from Surprising Earnings News among Economically Linked Firms}, volume = {26}, number = {4}, pages = {27--40}, year = {2017}, doi = {10.3905/joi.2017.26.4.027}, publisher = {Institutional Investor Journals Umbrella}, abstract = {The authors examine investors{\textquoteright} limited attention to surprising earnings news among economically linked firms. They do not find evidence of investors{\textquoteright} attention constraints on supplier firms after the announcement of customer firms{\textquoteright} surprising earnings news. Abnormal returns of supplier firms at the announcement of customer firms{\textquoteright} negative (positive) standardized unexpected earnings (SUE) are negative (positive) and significant, and cumulative abnormal returns (CAR) from day 1 to day 10 become insignificant. They also document that information uncertainty delays the diffusion of information between economically linked firms. Thus, the notion of limited attention is not a universal phenomenon, but it is subject to the nature of both the news and the parties involved.TOPICS: Fundamental equity analysis, portfolio theory}, issn = {1068-0896}, URL = {https://joi.pm-research.com/content/26/4/27}, eprint = {https://joi.pm-research.com/content/26/4/27.full.pdf}, journal = {The Journal of Investing} }