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Capital Market Consequences of Managers’ Voluntary Disclosure Styles

50 Pages Posted: 24 Aug 2011  

Holly Yang

Singapore Management University - School of Accountancy

Multiple version iconThere are 2 versions of this paper

Date Written: August 24, 2011

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

Suggested Citation

Yang, Holly, Capital Market Consequences of Managers’ Voluntary Disclosure Styles (August 24, 2011). Journal of Accounting & Economics (JAE), Forthcoming. Available at SSRN: https://ssrn.com/abstract=1916226

Holly Yang (Contact Author)

Singapore Management University - School of Accountancy ( email )

60 Stamford Road
Singapore 178900
Singapore

HOME PAGE: http://sites.google.com/site/holly0417phd/

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