Forecasts and Earnings
37 Pages Posted: 26 May 2000
Date Written: February 29, 2000
This paper examines the interaction between an analyst's disclosure and a manager's earnings report. We show how the nature of the analyst's information affects the quality of reported earnings. We also provide conditions for the analyst's disclosure to reduce the quality of investor information in total (i.e., from all sources). Finally, we offer some comparative static results pertaining to earnings quality and derive empirical predictions for short-window event studies and long-window association studies.
JEL Classification: M41, M43, G14, G24, G29
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