Investors' Reaction to Financial Reporting – Empirical Studies on Price Volatility on the Bucharest Stock Exchange

In this study, the impact of financial reporting upon investment decision is assessed through investors' behavior and measured by the stock price variation. This research analyzes preliminary, semestrial, and quarterly financial reports from 24 BSE listed companies, namely companies within the BET XT index (14) and companies within the BET AeRO index (10), over the reporting periods between 2018 and 2022. The main finding shows that investors, instead of being influenced by the market general trend, reacted rationally in 47% of the cases as they assigned the highest importance to the fundamentals from the preliminary reports. Based on the results obtained from the two indicators introduced in the research, we concluded that between financial reporting and market sentiment, the factor with the highest level of influence on price variation was financial reporting.