Abstract

http://ssrn.com/abstract=1980195
 
 

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What Do Management Earnings Forecasts Convey About the Macroeconomy?


Samuel B. Bonsall IV


Ohio State University (OSU) - Department of Accounting & Management Information Systems

Zahn Bozanic


Ohio State University (OSU) - Department of Accounting & Management Information Systems

Paul E. Fischer


University of Pennsylvania - The Wharton School

January 15, 2013

Journal of Accounting Research, 2013, Vol. 51(2), 225-266

Abstract:     
We decompose quantitative management earnings forecasts into macroeconomic and firm-specific components to determine the extent to which voluntary disclosure provided by management has macroeconomic information content. We provide evidence that the forecasts of bellwether firms, which are defined as firms in which macroeconomic news explains the greatest amount of variation in the forecasts, provide timely information to the market about the macroeconomy when bundled with earnings announcements. Further, we show that bellwether firms provide timely information about both industry-specific events and broader economic events. Finally, we document that the macroeconomic news in individual forecasts is more pronounced for bad news and point forecasts.

Number of Pages in PDF File: 53

Keywords: Voluntary disclosure, management earnings forecasts, bellwether firms, macroeconomic risk

JEL Classification: E44, G14, M41

Accepted Paper Series


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Date posted: January 8, 2012 ; Last revised: June 2, 2014

Suggested Citation

Bonsall, Samuel B. and Bozanic, Zahn and Fischer, Paul E., What Do Management Earnings Forecasts Convey About the Macroeconomy? (January 15, 2013). Journal of Accounting Research, 2013, Vol. 51(2), 225-266. Available at SSRN: http://ssrn.com/abstract=1980195 or http://dx.doi.org/10.2139/ssrn.1980195

Contact Information

Samuel B. Bonsall IV
Ohio State University (OSU) - Department of Accounting & Management Information Systems ( email )
2100 Neil Avenue
Columbus, OH 43210
United States
Zahn Bozanic (Contact Author)
Ohio State University (OSU) - Department of Accounting & Management Information Systems ( email )
2100 Neil Avenue
Columbus, OH 43210
United States
Paul E. Fischer
University of Pennsylvania - The Wharton School ( email )
3641 Locust Walk
Philadelphia, PA 19104-6365
United States

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