Capital market consequences of managers' voluntary disclosure styles

Holly I. Yang

Journal of Accounting and Economics, 2012, vol. 53, issue 1, 167-184

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.

Keywords: Management credibility; Earnings guidance; Management forecasts; Management styles (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (42)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:53:y:2012:i:1:p:167-184

DOI: 10.1016/j.jacceco.2011.08.003

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