Joint Meeting of the Mid-Atlantic and Northeast Regions

The Interplay between Information Acquisition and Information Integration: Evidence from EDGAR Search Volume around 10-K/10-Q Filing Dates

• In Event: Information Acquisition and Investor Reactions

Abstract

We study the interplay between information acquisition and two aspects of information integration—information interpretation and information updating. We contribute to the literature by shedding light on a specific nature of interactivity between these two types of disclosure processing activities and associated information costs. Using EDGAR search volume around 10-K/10-Q filing dates as a proxy for information acquisition, we find that, as information search increases, information interpretation increases, but information updating does not change. When we divide total search volume into current search volume of newly filed reports and historical search volume of previously filed reports, we find that current search volume is associated with increased information interpretation and information updating, whereas historical search volume is associated with increased information interpretation and decreased information updating. We also find that information quality in the current filing influences the association between information acquisition and information integration. Taken together, our evidence suggests that information acquisition activities reveal useful information about how investors integrate accounting information through their trading decisions.

Authors

• Joshua Coyne, University of Memphis

• Kevin Kim, The University of Memphis

• Sangwan Kim, University of Massachusetts-Boston