Catering behaviors in corporate digitization disclosures: Identification and analyst forecast accuracy loss

Bole Zhou, Lili Ma and Shenghao Yang

Research in International Business and Finance, 2024, vol. 68, issue C

Abstract: This paper identifies the catering behaviors in corporate digitization disclosures (CDD) and examines their effects on analyst forecast accuracy. By creating a peer-relative catering behavior score, we measure the extent to which firms cater to investors and provide evidence that catering behaviors in CDD decrease the improvement effect of CDD on analyst forecast accuracy. We further find that catering behaviors reduce the improvement effect of CDD by decreasing information quality and information comparability. Finally, we document that the reduction effect of catering behaviors is more pronounced in firms with poor information environment and firms followed by fewer expert analysts. Overall, our findings are consistent with the argument that narrative disclosures can be used both to reduce information asymmetry and to cater to investor demand.

Keywords: Corporate digitization disclosure; Catering behavior; Analyst forecast accuracy (search for similar items in EconPapers)
JEL-codes: G12 G14 M41 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:68:y:2024:i:c:s0275531923003276

DOI: 10.1016/j.ribaf.2023.102201

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