Managerial Learning from Analyst Feedback to Voluntary Capex Guidance, Investment Efficiency, and Firm Performance

Jihun Bae (), Gary C. Biddle () and Chul W. Park ()
Additional contact information
Jihun Bae: Department of Business Economics, Erasmus School of Economics, Erasmus University Rotterdam, Burgemeester Oudlaan 50, 3062 PA Rotterdam, Netherlands
Gary C. Biddle: Department of Accounting, Faculty of Business and Economics, University of Melbourne, Carlton, Victoria 3010, Australia
Chul W. Park: Independent, Seoul 03631, Korea

Management Science, 2022, vol. 68, issue 1, 583-607

Abstract: We test predictions that managers issuing voluntary capex guidance learn from analyst feedback and that this learning enhances investment efficiency and firm performance. Our findings are consistent with these predictions. First, we find that managers’ capex adjustments and capex guidance revisions relate positively with analyst feedback measured by differences between postguidance analyst capex forecasts and managerial capex guidance. Second, changes in investment efficiency relate positively with analyst feedback. Third, subsequent firm financial performance relates positively with the predicted values of both managers’ capex adjustments and capex guidance revisions. These findings extend prior evidence regarding sources of managerial learning and investment efficiency and help to explain the active issuance of voluntary guidance by managers in settings where, as for capex guidance, the potential for managerial learning from related share price effects is limited, as we also explain.

Keywords: voluntary disclosure; capex guidance; analyst feedback; managerial learning; investment efficiency; firm performance (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://dx.doi.org/10.1287/mnsc.2020.3896 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:68:y:2022:i:1:p:583-607

Access Statistics for this article

More articles in Management Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().