Post-earnings-announcement drift anomaly: The role of operating and non-operating income in the Taiwanese stock market
Post-earnings-announcement drift anomaly: The role of operating and non-operating income in the Taiwanese stock market
This paper examines the relationship between unexpected earnings components (i.e., unexpected operating and non-operating income) and post-earningsannouncement drift to determine whether both components contribute to the mispricing phenomenon. I find that both operating and non-operating income surprises explain the market’s underweighting of earnings surprises. However, the contribution of operating income surprises is significantly higher than non-operating income surprises. While the misprici