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The DOI matches its Crossref record; 3 of the 3 references it cites were found in a registry or an index.

Driven to Distraction: Extraneous Events and Underreaction to Earnings News

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HIRSHLEIFER, DAVID, LIM, SONYA SEONGYEON, TEOH, SIEW HONG·2009·The Journal of Finance
DOI 10.1111/j.1540-6261.2009.01501.x
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Abstract

Recent studies propose that limited investor attention causes market underreactions. This paper directly tests this explanation by measuring the information load faced by investors. The investor distraction hypothesis holds that extraneous news inhibits market reactions to relevant news. We find that the immediate price and volume reaction to a firm's earnings surprise is much weaker, and post‐announcement drift much stronger, when a greater number of same‐day earnings announcements are made by other firms. We evaluate the economic importance of distraction effects through a trading strategy, which yields substantial alphas. Industry‐unrelated news and large earnings surprises have a stronger distracting effect.

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  • Investors tend to pay more attention to bad news than good news.

    “Investors tend to pay more attention to bad news than good news, which is supported by Wall Street adage that 'markets take the stairs up and the elevator down' and by index option trading where fund managers focus on hedging downside risk (e.g., Chen, Joslin, and Ni, 2019).”

    From ChatGPT and Deepseek: Can They Predict the Stock Market and Macroeconomy? (2025) · cites this paper as Hirshleifer, Lim, and Teoh, 2009

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Citations

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Research works printed but not linked: 48

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Metadata

Authors
HIRSHLEIFER, D., LIM, S. S., & TEOH, S. H.
Affiliations
  • DePaul University (US)
  • University of California, Irvine (US)
ORCID
Venue
The Journal of Finance
Publisher
Wiley
Published
2009-09-28
Volume
64
Issue
5
Pages
2289-2325
ISSN
  • 0022-1082 (ISSN-L)
  • 1540-6261
DOI
10.1111/j.1540-6261.2009.01501.x
OpenAlex
W3122186295
Cited by
1,542
References
3
Citations by year
2026: 122 · 2025: 160 · 2024: 152 · 2023: 124 · 2022: 111 · 2021: 116 · 2020: 106 · 2019: 87 · 2018: 95 · 2017: 85 · 2016: 69 · 2015: 63 · 2014: 78 · 2013: 52 · 2012: 48
FWCI
63.14
Type
journal article
Language
en
Open access
Licence
onlinelibrary.wiley.com/termsAndConditions#vor (vor)
Locations
  • The Journal of Finance (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Finance › Financial Markets and Investment Strategies
  • Social Sciences › Business, Management and Accounting › Accounting › Financial Analysis and Corporate Governance
  • Social Sciences › Economics, Econometrics and Finance › Finance › Corporate Finance and Governance
Keywords
market underreaction, earnings announcements, earnings surprises, post-announcement drift, information overload, trading strategies

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