Competition Culture and Meeting/Beating Analysts’ Earnings Forecasts

Terry Harris ()
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Terry Harris: Durham University

Chapter Chapter 7 in Competition Culture and Corporate Finance, 2023, pp 149-164 from Springer

Abstract: Abstract In this chapter, we investigate whether and how firms’ competition culture influences their propensity to meet and/or beat analysts’ earnings forecasts. We have argued that the mechanism underpinning the relationship between competition culture and stock price crashes is the hoarding of “bad” news, which once released results in sudden idiosyncratic stock price crashes. If high competition culture firms systematically withhold negative news from the market in order to meet the expectations of investors, then we expect to observe such firms being more likely to consistently meet/beat analysts’ earnings forecasts.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-30156-8_7

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DOI: 10.1007/978-3-031-30156-8_7

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