Differential effects of regulation FD on short- and long-term analyst forecasts

Bin Srinidhi, Sidney Leung and Bikki Jaggi

Journal of Accounting and Public Policy, 2009, vol. 28, issue 5, 401-418

Abstract: In this paper, we provide evidence that the quality of short-term analyst forecasts improved but the quality of long-term analyst forecasts deteriorated after the implementation of Regulation Fair Disclosure (FD). More specifically, our results show that the precision of the idiosyncratic information component of short-term forecasts improved in the post-FD period, whereas the precision of both the common and idiosyncratic information components of long-term forecasts declined. We attribute this result to the reduced disclosure of long-term, future-oriented information in the post-FD period. Thus our results support assertions by some analysts that FD has had a chilling effect on information that is relevant to long-term forecasts.

Keywords: Regulation; FD; Analyst; forecast; Idiosyncratic; and; common; information; components; Long-term; and; short-term; forecasts (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jappol:v:28:y:2009:i:5:p:401-418

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