Country-Level Institutions and Management Earnings Forecasts

Forthcoming, Journal of International Business Studies

52 Pages Posted: 19 Dec 2018

See all articles by Wenjing Li

Wenjing Li

Jinan University, School of Management

Jeff Ng

Chinese University of Hong Kong (CUHK) - School of Accountancy

Albert Tsang

York University - Schulich School of Business

Oktay Urcan

University of Illinois at Urbana-Champaign

Date Written: December 11, 2018

Abstract

Using a comprehensive sample hand-collected from the original texts of management earnings forecasts from 27 countries, we provide descriptive evidence on the country-level institutional determinants and economic consequences of forecast characteristics. Using principal component factors constructed from a number of country-level institutional variables, we find that forecast disaggregation, frequency, precision, and attribution vary significantly with the business and accounting environment of a country. We further document that better quality management forecasts are generally associated with stronger stock market reactions and higher investment efficiency. Together, our findings suggest that country-level institutions play a vital role in voluntary disclosure characteristics.

Keywords: voluntary disclosure, management forecasts, investment efficiency

JEL Classification: M16, M41

Suggested Citation

Li, Wenjing and Ng, Jeff and Tsang, Albert and Urcan, Oktay, Country-Level Institutions and Management Earnings Forecasts (December 11, 2018). Forthcoming, Journal of International Business Studies. Available at SSRN: https://ssrn.com/abstract=3299530

Wenjing Li

Jinan University, School of Management ( email )

No. 601, West Huangpu Road
Guangzhou, Guangdong 510632
China

Jeff Ng

Chinese University of Hong Kong (CUHK) - School of Accountancy ( email )

Shatin, N.T.
Hong Kong
+852 39437742 (Phone)

Albert Tsang

York University - Schulich School of Business ( email )

4700 Keele Street
Toronto, Ontario M3J 1P3
Canada

Oktay Urcan (Contact Author)

University of Illinois at Urbana-Champaign ( email )

515 E. Gregory Drive
4009 BIF MC-520
Champaign, IL 61820
United States
217-265-0383 (Phone)
217-244-0902 (Fax)

HOME PAGE: http://business.illinois.edu/profile/oktay-urcan/

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