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The power of crowds: can minority shareholder activism promote management earnings forecast accuracy

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  • Yinju Nie
  • Ming Jia

Abstract

Novel online activism of minority shareholders could be a new governance mechanism but has received little academic attention. This study examines the impact of such minority shareholder activism on management earnings forecast accuracy. Based on a sample of publicly listed firms in the Chinese Shenzhen Stock Exchange between 2010 and 2018, we find that online activism promotes earnings forecast accuracy. The effect is stronger with more negative media coverage and higher manager response quality. Overall, our results indicate that minority shareholders in China could play a monitoring role when they are empowered with voice in the information age.

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  • Yinju Nie & Ming Jia, 2021. "The power of crowds: can minority shareholder activism promote management earnings forecast accuracy," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(5), pages 6333-6385, December.
    • Handle: RePEc:bla:acctfi:v:61:y:2021:i:5:p:6333-6385
    DOI: 10.1111/acfi.12864
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    3. Lee, Eugenia Y. & Ha, Wonsuk, 2022. "Electronic voting and strategic disclosure before shareholder meetings," Economics Letters, Elsevier, vol. 219(C).
    4. Chuanzi Guo & Minghua Gao & Junyi Li, 2023. "Research on the Role of Minority Shareholders in State-Owned Enterprises Based on Big Data," Sustainability, MDPI, vol. 15(3), pages 1-18, January.
    5. Han, Han & Wang, Zhibin & Zhao, Xueqing, 2023. "Minority shareholder activism, threat of exit and pay-performance sensitivity," Finance Research Letters, Elsevier, vol. 56(C).
    6. Wang, Zhibin & Li, Zelei, 2023. "Does minority shareholder activism enhance corporate innovation? Evidence from China," Finance Research Letters, Elsevier, vol. 54(C).
    7. Lee, Eugenia Y. & Ha, Wonsuk, 2023. "Electronic voting in shareholder meetings and the market value of cash holdings," International Review of Financial Analysis, Elsevier, vol. 89(C).
    8. Kaijuan Gao & Manya Wang & Renyun Zhang, 2023. "Institutional investors' corporate site visits and firm management earnings forecasts," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(4), pages 4479-4504, December.
    9. Haidong Li & Ziming Qian & Shanyong Wang & Jing Wang & Qian Wang, 2023. "Do green concerns promote corporate green innovation? Evidence from Chinese stock exchange interactive platforms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1786-1801, April.
    10. Chen, Shen & Chen, Yuran & Zhang, Di & Wang, Jinmei, 2023. "Can minority investor activism promote corporate risk-taking? Evidence from a quasi-natural experiment in China," International Review of Financial Analysis, Elsevier, vol. 85(C).
    11. Wei Deng & Jing Shao, 2022. "Empowering Green Development: How Social Media Interaction Influences Environmental Information Disclosure of High-Polluting Firms," IJERPH, MDPI, vol. 19(16), pages 1-20, August.

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