Long-term price effect of S&P 500 addition and earnings quality

When a company is added to the S&P 500 Index, it receives a positive price response. Several explanations for this effect have been suggested, but empirical findings do not provide a conclusive cause. The inclusion of a company in the index may strengthen managerial incentives to provide high-quality disclosures of financial data. This study is an examination of the earnings quality of S&P 500 …