Capital Market Consequences of Managers’ Voluntary Disclosure Styles

50 Pages Posted: 13 Oct 2010 Last revised: 19 Mar 2019

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Holly Yang

Singapore Management University - School of Accountancy

Multiple version iconThere are 2 versions of this paper

Date Written: October 12, 2010

Abstract

This paper studies the capital market consequences of managers establishing an individual forecasting style. Using a manager-firm matched panel dataset, I examine whether and when manager-specific credibility matters. If managers’ forecasting styles affect their perceived credibility, then the stock price reaction to forecast news should increase with managers’ prior forecasting accuracy. Consistent with this prediction, I find that the stock price reaction to management forecast news is stronger when information uncertainty is high and when the manager has a history of issuing more accurate forecasts, indicating that individual managers benefit from establishing a personal disclosure reputation.

Keywords: Management Credibility, Earnings Guidance, Management Forecasts, Management Styles

JEL Classification: M41

Suggested Citation

Yang, Holly, Capital Market Consequences of Managers’ Voluntary Disclosure Styles (October 12, 2010). Available at SSRN: https://ssrn.com/abstract=1691394 or http://dx.doi.org/10.2139/ssrn.1691394

Holly Yang (Contact Author)

Singapore Management University - School of Accountancy ( email )

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Singapore 178900
Singapore

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