Analysts’ cash flow forecasts and firms’ information environment: evidence from bid-ask spread

Mengyu Ma

International Journal of Accounting & Information Management, 2024, vol. 32, issue 3, 430-446

Abstract: Purpose - This study aims to investigate whether the cash flow forecasts (CFF) of analysts can disseminate valuable information to the information environments of companies. Design/methodology/approach - The author uses empirical archival methodology to conduct differences-in-difference analyses. Findings - It is found that information asymmetry decreases in the treatment group following the initiation of CFF during the postperiod, which is consistent with the hypothesis of this paper. Originality/value - To the best of the author’s knowledge, this study is the first among the cash flow forecast studies to demonstrate the usefulness of CFF in the mitigation of information asymmetry, a friction that is widespread in capital markets.

Keywords: Financial analysts; Cash flow forecasts; Information asymmetry; Bid-ask spread (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijaimp:ijaim-10-2023-0265

DOI: 10.1108/IJAIM-10-2023-0265

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