원문정보
초록
영어
In this paper, we examine whether the change of electricity usage is informative about subsequent earnings changes. We anticipate that electricity usage is a leading indicator for future sales and increased electricity will lead to higher earnings. Using hand-collected data on electricity usage for Korean firms for the sample period of 2006- 2014, we find a positive association between changes in electricity usage and subsequent earnings after controlling for factors that may affect future profitability. We also report that changes in electricity usage predict future stock returns. A positive relation between electricity changes and future returns still holds even after controlling for the fundamental signals and various risk factors. A hedge portfolio strategy that buys the top quintile of electricity changes and sells the bottom quintile of electricity changes leads to an economically significant 4.80% annual abnormal return. In addition, we find evidence that the positive relation between changes in electricity and future returns is more salient for firms with high information asymmetry. Overall, the results suggest that firms’ electricity usage is an important indicator for future profitability and investors do not fully incorporate the implications of electricity usage for future profitability.
목차
1. Introduction
2. Related Literature and Hypothesis Development
3. Data and Research Design
4. Empirical Results
5. Summary and conclusions
References