Business Strategy and Intra-Industry Information Transfers

Peng Guo

Abstract


This study examines whether business strategy affects information transfers from one firm to its industry peers. I use Miles and Snow’s (1978, 2003) organizational typology to classify firms along a continuum with innovative ‘prospector’ firms at one end and stable low-growth ‘defender’ firms at the other. When a firm announces its earnings, the information transfer to other peer firms in the same industry is weaker (stronger) when the announcing firm is a prospector (defender). In addition, information transfers from the announcing firm to industry peers are weaker (stronger) when the industry peer is a prospector (defender). Taken together, the evidence in this paper suggests that firms’ business strategies affect the strength of information transfers.


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DOI: https://doi.org/10.5430/afr.v6n3p1

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Accounting and Finance Research
ISSN 1927-5986 (Print)   ISSN 1927-5994 (Online)

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