A Literature Synthesis of Experimental Studies on Management Earnings Guidance

Journal of Accounting Literature, Forthcoming

49 Pages Posted: 24 May 2013

See all articles by Jun Han

Jun Han

The University of Hong Kong

Date Written: May 23, 2013


Researchers have long been interested in understanding why and how corporate managers issue earnings guidance and the effect of such guidance on stakeholders’ (investors’ and managers’) behavior. Several recent studies have employed the experimental approach to address these issues. The purpose of this paper is to analyze and synthesize the literature on experimental studies of management earnings guidance. Consistent with the literature, I organize the synthesis to reflect (a) whether, why and how management issues guidance; (b) investors’ reactions to guidance; (c) the effect of guidance on management behavior. In addition, I provide institutional information (e.g., nature and timing of guidance) about guidance as well as provide several directions for future research. The synthesis reveals that the experimental studies have made a unique contribution to this literature by (i) providing evidence on process variables that underlie some empirical associations, (ii) directly measuring managers’ personal attributes and, (iii) closing the causality gap in the guidance literature.

Keywords: experiment, financial accounting, management earnings guidance, management forecast

JEL Classification: M41

Suggested Citation

Han, Jun, A Literature Synthesis of Experimental Studies on Management Earnings Guidance (May 23, 2013). Journal of Accounting Literature, Forthcoming, Available at SSRN: https://ssrn.com/abstract=2269484

Jun Han (Contact Author)

The University of Hong Kong ( email )

Pokfulam Road
Hong Kong, Pokfulam HK
852 22415846 (Phone)

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