Differences in Quarterly Earnings Settling Effect by Market

The purpose of this study is to analyze the difference in the quarterly earnings settling effect between the KOSPI and KOSDAQ markets. Using the research model based on the Paek(2016)’s, we examined whether there is a difference in the quarterly earnings settling effect between the KOSPI and KOSDAQ markets. As a result of analyzing 30,916 company-year-quarter data for KOSPI and KOSDAQ listed companies from 2018 to 2022, we confirmed that the market-specific dummy variable has a statistically significant relationship with the quarterly earnings settling effect. This means that even after controlling for variables that are likely to affect the effect, KOSDAQ companies showed lower quarterly earnings settling effect than KOSPI companies. The KOSDAQ market, moreover, was statistically significantly larger than the KOSPI market in the fourth quarter when annual reporting’s confirmation is ahead, indicating that KOSDAQ companies with high volatility was larger than the KOSPI’s. This study has academic significance to provides the need for a more precise interpretation of quarterly earnings and an understanding between KOSPI and KOSDAQ markets by revealing the difference of structural problem of quarterly earnings.