Relative Emphasis on Non-GAAP Earnings in Earnings Press Releases: A Comparative Analysis of U.S. Listed and Cross-Listed Firms
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- This study examines whether cross-listed companies on the U.S. place less relative emphasis on non-GAAP measures disclosed in earnings press releases (EPRs) compared to domestically listed U.S. companies. Based on a database of 37,138 EPRs from 14,191 firms, we construct five measures focusing on relative emphasis, of which three measures are based on figures which assess the frequency and placement of non-GAAP figures relative to GAAP measures, and two measures are based on the occurrence of non-GAAP words in EPRs. We find that cross-listed companies tend to disclose non-GAAP figures later and after GAAP figures in EPRs, and they tend to place stronger emphasis on the frequency of non-GAAP figures and the occurrence of non-GAAP words in EPRs. These mixed results do not allow us to confirm our initial hypothesis. They point to more intricated and complementary strategies in the use of GAAP and non-GAAP measures in the cross-listed companies ERPs. A potential explanation for these findings would suggest that cross-listed companies disclose more information to enhance investor confidence.