Abstract

http://ssrn.com/abstract=2034378
 
 

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Does Company Reputation Matter for Voluntary Disclosure Quality? Evidence from Management Earnings Forecasts


Ying Cao


The Chinese University of Hong Kong (CUHK) - School of Accountancy

Cory A. Cassell


University of Arkansas

Linda A. Myers


University of Arkansas

Thomas C. Omer


University of Nebraska at Lincoln - School of Accountancy

October 2013


Abstract:     
In this study, we explore the association between company reputation and voluntary disclosure quality as proxied for by the issuance and characteristics of management earnings forecasts. We follow prior literature and proxy for company reputation using measures based on Fortune’s America’s Most Admired Companies List. For a sample of 13,255 company-year observations from 1995 through 2011, we find that companies with higher reputations are more likely to issue earnings forecasts, and they tend to issue more frequent and more precise forecasts than do other companies. We also find that for the subsample of companies selected to the Most Admired List, earnings forecasts issued by higher reputation companies are more accurate. Our study contributes to the voluntary disclosure literature by identifying a unique factor that motivates companies to voluntarily disclose better forward-looking information, and to the reputation literature by demonstrating the effect of company reputation on company efforts to reduce information asymmetry with stakeholders.

Number of Pages in PDF File: 47

Keywords: Company reputation, disclosure quality, management forecasts

JEL Classification: M41

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Date posted: April 5, 2012 ; Last revised: October 29, 2013

Suggested Citation

Cao, Ying and Cassell, Cory A. and Myers, Linda A. and Omer, Thomas C., Does Company Reputation Matter for Voluntary Disclosure Quality? Evidence from Management Earnings Forecasts (October 2013). Available at SSRN: http://ssrn.com/abstract=2034378 or http://dx.doi.org/10.2139/ssrn.2034378

Contact Information

Ying Cao
The Chinese University of Hong Kong (CUHK) - School of Accountancy ( email )
Shatin, N.T.
Hong Kong
Cory A. Cassell
University of Arkansas ( email )
Business Bldg. 454
Fayetteville, AR 72701
United States
Linda A. Myers (Contact Author)
University of Arkansas ( email )
Fayetteville, AR 72701
United States
Thomas C. Omer
University of Nebraska at Lincoln - School of Accountancy ( email )
307 College of Business Administration
Lincoln, NE 68588-0488
United States
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