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The Accuracy of Sales Forecasts Disclosed in the IPO Prospectuses: Evidence From Istanbul Stock Exchange

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  • Halil Ýbrahim Bulut

Abstract

This paper examines the accuracy of sales forecasts disclosed in the prospectuses by the Turkish IPO (Initial Public Offering) companies at the Istanbul Stock Exchange during the period 2002-2007. Their accuracy is measured by forecast errors, absolute forecast errors, and squared forecast errors. A number of company specific characteristics such as company size, company age, auditing firm reputation, investment bank reputation, forecast horizon, financial leverage, retained ownership, and industry membership are tested to see whether these variables make any difference for the accuracy of sales forecasts among the IPO firms. The results of this study show that there are significant differences between the forecasting numbers and realized numbers of Turkish IPO firms. However, these differences are statistically significant only for industry membership.

Suggested Citation

  • Halil Ýbrahim Bulut, 2009. "The Accuracy of Sales Forecasts Disclosed in the IPO Prospectuses: Evidence From Istanbul Stock Exchange," Istanbul Stock Exchange Review, Research and Business Development Department, Borsa Istanbul, vol. 11(43), pages 17-52.
    • Handle: RePEc:bor:iserev:v:11:y:2009:i:43:p:17-52
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    File URL: http://www.borsaistanbul.com/datum/imkbdergi/EN/ISE_Review_43.pdf
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    References listed on IDEAS

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    Cited by:

    1. Li Chen & David Hay & Jingyuan Zhuang, 2020. "Initial public offering prospectus forecast errors and mandatory explanations: evidence from New Zealand," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(3), pages 2167-2202, September.

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    More about this item

    Keywords

    Anahtar kelimeler: Forecasting accuracy; Determinants of forecasting accuracy; IPOs; Istanbul Stock Exchange;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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