Accounting Papers

Document Type

Journal Article

Date of this Version

2012

Publication Source

Journal of Accounting and Economics

Volume

53

Issue

1-2

Start Page

167

Last Page

184

DOI

10.1016/j.jacceco.2011.08.003

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.

Copyright/Permission Statement

© 2012. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/

Keywords

management credibility, earnings guidance, management forecasts, management styles

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Date Posted: 27 November 2017

This document has been peer reviewed.