The Impact of Investor Relations Disclosure on Analysts’ Forecasts

27 Pages Posted: 23 Aug 2010

See all articles by Liyin Hooi

Liyin Hooi

The University of Western Australia

Marvin Wee

Australian National University (ANU); Financial Research Network (FIRN)

Millicent Chang

The University of Western Australia; University of Wollongong

Date Written: August 22, 2010

Abstract

Investor relations represents a firm’s commitment to communicate effectively with the external community which includes investors and analysts and both mandatory and voluntary information release is expected to reduce information asymmetry. We investigate the effects of disclosure quality on corporate websites on several properties of analyst forecasts, including accuracy, dispersion and revision volatility. We find more extensive disclosure through investor relations in S&P/ASX 300 firms over the time period investigated and increased disclosure quality leading to more accurate forecasts and less revision volatility, These findings emphasise the importance for firms to communicate effectively with analysts, whose earnings forecasts form the basis of the market’s expectation of firm performance.

Keywords: Investor relations, disclosure quality, analysts forecasts, internet reporting

JEL Classification: G14

Suggested Citation

Hooi, Liyin and Wee, Marvin and Chang, Millicent, The Impact of Investor Relations Disclosure on Analysts’ Forecasts (August 22, 2010). 23rd Australasian Finance and Banking Conference 2010 Paper. Available at SSRN: https://ssrn.com/abstract=1663477 or http://dx.doi.org/10.2139/ssrn.1663477

Liyin Hooi

The University of Western Australia ( email )

35 Stirling Highway
Crawley, Western Australia 6009
Australia

Marvin Wee

Australian National University (ANU) ( email )

The Australian National University
College of Business and Economics
Canberra, 2601
Australia
+61 2 61250416 (Phone)

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Millicent Chang (Contact Author)

The University of Western Australia ( email )

35 Stirling Highway
Crawley, Western Australia 6009
AUSTRALIA

University of Wollongong ( email )

Northfields Avenue
Wollongong, New South Wales 2522
Australia

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