How Does Investor Relations Disclosure Affect Analysts' Forecasts?

27 Pages Posted: 5 Jun 2014

See all articles by Millicent Chang

Millicent Chang

The University of Western Australia; University of Wollongong

Liyin Hooi

The University of Western Australia

Marvin Wee

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

Date Written: June 2014

Abstract

We study the relationship between investor relations disclosure and analyst forecast properties in Australian firms, a setting dominated by small firms with limited analyst coverage and requiring continuous disclosure of price sensitive information. We find increasing disclosure in the time period investigated is associated with greater accuracy in firms disclosing fewer items. Disclosure was unrelated to forecast dispersion, possibly due to the low analyst following. In periods of uncertainty, the investor relations awards effectively discriminated quality from quantity of disclosure. These findings highlight the importance of active communication with analysts, particularly in firms providing less disclosure and during periods of uncertainty.

Keywords: Investor relations, Disclosure, Analyst forecasts, Financial uncertainty

Suggested Citation

Chang, Millicent and Hooi, Liyin and Wee, Marvin, How Does Investor Relations Disclosure Affect Analysts' Forecasts? (June 2014). Accounting & Finance, Vol. 54, Issue 2, pp. 365-391, 2014. Available at SSRN: https://ssrn.com/abstract=2446270 or http://dx.doi.org/10.1111/acfi.12046

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

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

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