Event Details

Date: November 11, 2020
Time: 12:30 pm to 1:30 pm
Location: Online Via Zoom
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Title: Multimarket Contact and Earnings Quality: Evidence from the Insurance Industry

Abstract:
This study investigates the effect of multimarket contact (i.e., the degree of market overlap between firms) on earnings quality by using a large sample of property-casualty insurers in the United States. Results show an inverted U-shaped relationship between multimarket contact and earnings quality. Specifically, insurers report higher-quality loss reserves with growing levels of multimarket contact. However, when multimarket contact reaches a certain level, loss reserve quality declines as the level of multimarket contact continues to increase. Our results suggest that heightened competition discourages earnings management while mutual forbearance erodes earnings quality. Overall, we provide initial evidence that multimarket contact influences the financial reporting quality of firms.

Hear from Yijia Lin from the University of Nebraska as part of the Robert A. Hedges Research Seminar Series, hosted by the Department of Risk, Insurance and Healthcare Management in the Fox School of Business. The seminar series comprises invited lectures from academics experts around the world who present research in insurance, risk management and actuarial science.

About This Series: The Robert A. Hedges Research Seminar Series is hosted by the Department of Risk, Insurance, and Healthcare Management in the Fox School of Business. The seminar series comprises invited lectures from academics experts around the world who present research in insurance, risk management, and actuarial science.

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