Outbreak risk, managerial distraction, and corporate information disclosure: Evidence from the COVID-19 pandemic

Brian Yutao Wang, Ruiyao Xu and Jing Zhang

Pacific-Basin Finance Journal, 2022, vol. 73, issue C

Abstract: To fill the gaps between managerial distraction and disclosure quality of management earnings forecasts (MEFs), we examine the effects of managerial selective attention resulting from the COVID-19 pandemic. Using this pandemic in 2020 as an adverse shock potentially causing managerial distraction, results based on a difference-in-differences estimation suggest that managerial distraction had a negative effect on MEFs and affected forecast quality by increasing work burden and perceptual narrowing among managers, while cash reserves demonstrated a preventive function and alleviated such adverse effects. Our findings are robust, as supported by tests that address potential measurement errors.

Keywords: COVID-19; Managerial distraction; Management earnings forecast (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:73:y:2022:i:c:s0927538x22000312

DOI: 10.1016/j.pacfin.2022.101736

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