Abstract

http://ssrn.com/abstract=1695121
 
 

Citations



 


 



Is Silence Golden? An Empirical Analysis of Firms that Stop Giving Quarterly Earnings Guidance


Shuping Chen


University of Texas at Austin - Red McCombs School of Business

Dawn A. Matsumoto


University of Washington - Department of Accounting

Shivaram Rajgopal


Emory University - Goizueta Business School

October 20, 2010

Journal of Accounting & Economics (JAE), Forthcoming

Abstract:     
We investigate firms that stop providing earnings guidance (stoppers) either by publicly announcing their decision (announcers) or doing so quietly (quiet stoppers). Relative to firms that continue guiding, stoppers have poorer prior performance, more uncertain operating environments, and fewer informed investors. Announcers commit to nondisclosure because they (i) do not expect to report future good news; or (ii) have lower incentives to guide due to the presence of long-term investors. The three-day return around the announcement is negative. Stoppers subsequently experience increases in analyst forecast dispersion and decreases in forecast accuracy but no change in return volatility or analyst following.

Accepted Paper Series


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Date posted: October 21, 2010  

Suggested Citation

Chen, Shuping and Matsumoto, Dawn A. and Rajgopal, Shivaram, Is Silence Golden? An Empirical Analysis of Firms that Stop Giving Quarterly Earnings Guidance (October 20, 2010). Journal of Accounting & Economics (JAE), Forthcoming. Available at SSRN: http://ssrn.com/abstract=1695121

Contact Information

Shuping Chen
University of Texas at Austin - Red McCombs School of Business ( email )
Austin, TX 78712
United States
521.471.5328 (Phone)
Dawn Matsumoto
University of Washington - Department of Accounting ( email )
224 Mackenzie Hall, Box 353200
Seattle, WA 98195-3200
United States
206-543-4454 (Phone)
206-685-9392 (Fax)
Shivaram Rajgopal (Contact Author)
Emory University - Goizueta Business School ( email )
1300 Clifton Road
Atlanta, GA 30322-2722
United States
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