Does ‘Internet+Sales’ business model help managers improve earnings forecast quality? – Based on the data of e-commerce platforms

Bo Peng and Chen He

China Journal of Accounting Studies, 2021, vol. 9, issue 2, 268-288

Abstract: Based on the data of firms opening stores on e-commerce platforms and DID regression model, we investigate the impacts of ‘Internet+Sales’ on management forecasts. In the view of accounting information transmission efficiency, ‘Internet+Sales’ can upgrade firms’ information technology and enhance managers’ ability to obtain earnings information, which help improve the timeliness of forecasts. However, in the view of sales uncertainty, ‘Internet+Sales’ will impact firms’ traditional sales activity and raise the difficulty for managers to estimate future earnings performance, which causes a decrease in the accuracy of forecasts. Moreover, we also find a decrease in customer concentration in these firms, and a better performance in forecast accuracy in the e-commerce platforms with less sales uncertainty policy, indicating that uncertainty can affect forecast accuracy. This paper provides specific evidence on how ‘Internet+’ affects management disclosure, and can help stakeholders have a better understanding of ‘Internet+Sales’ business model.

Date: 2021
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DOI: 10.1080/21697213.2021.1992937

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