This study investigates how both the amount of information provided in and the timing of new product preannouncements (NPPAs) influence firm value over the NPPA period, the new product introduction (NPI) period and in the long term, respectively. We adopt an information economics perspective, and signalling theory in particular, to motivate our tests. The findings show that the share price impact of the product information content varies over the different time horizons assessed. It is positive within the NPPA period and in the long term, but insignificant within the NPI period. The use of an early NPPA is associated with a negative impact on firm value across the NPPA, NPI and long-term horizons. We also test for moderating effects and show that earlier timing weakens the positive impacts of information amount on firm value both within the NPPA period and the long-term horizon.
Australian Journal of Management, Vol.43, No.1, pp.111-131