Levels of voluntary disclosure in IPO prospectuses : an empirical analysis
AbstractThis paper focuses on how forecasts information is disclosed in IPO prospectuses. In France, managers report either detailed forecasts or only a brief summary. We investigate the determinants and consequences of the varying levels of detail provided in these forecasts. Based on a sample of 82 IPOs on the Euronext Paris market (2000-2002), we show that only two variables are associated with highly detailed forecast disclosures: forecast horizon and firm age. We also find that the forecast error decreases as the level of detail in the forecast disclosures increases. This finding is robust to our reverse causality test (Heckman two-stage self-selection procedure) and suggests that the level of detail in forecast disclosures enhances the reliability of earnings forecasts.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by HEC Paris in its series Les Cahiers de Recherche with number 827.
Length: 36 pages
Date of creation: 21 Dec 2005
Date of revision:
IPO; forecast disclosure; forecast error;
Other versions of this item:
- Anne Cazavan-Jeny & Thomas Jeanjean, 2007. "Levels of voluntary disclosure in IPO prospectuses: an empirical analysis," Review of Accounting and Finance, Emerald Group Publishing, Emerald Group Publishing, vol. 6(2), pages 131-149, May.
- Cazavan-Jeny , Anne & Jeanjean, Thomas, 2006. "Levels of voluntary disclosure in IPO prospectuses: an empirical analysis," ESSEC Working Papers, ESSEC Research Center, ESSEC Business School DR 06001, ESSEC Research Center, ESSEC Business School.
- G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- M41 - Business Administration and Business Economics; Marketing; Accounting - - Accounting - - - Accounting
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-04-01 (All new papers)
- NEP-FIN-2006-04-01 (Finance)
- NEP-FMK-2006-04-01 (Financial Markets)
- NEP-FOR-2006-04-01 (Forecasting)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ross L. Watts, 1977. "Corporate Financial Statements, A Product of the Market and Political Processes," Australian Journal of Management, Australian School of Business, Australian School of Business, vol. 2(1), pages 53-75, April.
- Mak, Y. T., 1996. "Forecast disclosure by initial public offering firms in a low-litigation environment," Journal of Accounting and Public Policy, Elsevier, Elsevier, vol. 15(2), pages 111-136.
- Hughes, Patricia J., 1986. "Signalling by direct disclosure under asymmetric information," Journal of Accounting and Economics, Elsevier, Elsevier, vol. 8(2), pages 119-142, June.
- Michael Firth, 1998. "IPO profit forecasts and their role in signalling firm value and explaining post-listing returns," Applied Financial Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 8(1), pages 29-39.
- Heckman, James, 2013.
"Sample selection bias as a specification error,"
Applied Econometrics, Publishing House "SINERGIA PRESS",
Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
- Mak, Y. T., 1994. "The voluntary review of earnings forecasts disclosed in IPO prospectuses," Journal of Accounting and Public Policy, Elsevier, Elsevier, vol. 13(2), pages 141-158.
- Vijay Jog & Bruce J. McConomy, 2003. "Voluntary Disclosure of Management Earnings Forecasts in IPO Prospectuses," Journal of Business Finance & Accounting, Wiley Blackwell, Wiley Blackwell, vol. 30(1-2), pages 125-168.
- Jaggi, Bikki, 1997. "Accuracy of forecast information disclosed in the IPO prospectuses of Hong Kong companies," The International Journal of Accounting, Elsevier, Elsevier, vol. 32(3), pages 301-319.
- Brown, Philip & Clarke, Alex & How, Janice C. Y. & Lim, Kadir, 2000. "The accuracy of management dividend forecasts in Australia," Pacific-Basin Finance Journal, Elsevier, Elsevier, vol. 8(3-4), pages 309-331, July.
- T.Y. Cheng & Michael Firth, 2000. "An Empirical Analysis of the Bias and Rationality of Profit Forecasts Published in New Issue Prospectuses," Journal of Business Finance & Accounting, Wiley Blackwell, Wiley Blackwell, vol. 27(3-4), pages 423-446.
- La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei & Vishny, Robert, 2000.
"Investor protection and corporate governance,"
Journal of Financial Economics, Elsevier,
Elsevier, vol. 58(1-2), pages 3-27.
- Rafael LaPorta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert Vishny, . "Investor Protection and Corporate Governance," Working Paper 19455, Harvard University OpenScholar.
- La Porta, Rafael & Lopez-de-Silanes, Florencio & Schleifer, Andrei & Vishny, Robert, 2001. "Investor Protection and Corporate Governance," Working Paper Series, Harvard University, John F. Kennedy School of Government rwp01-017, Harvard University, John F. Kennedy School of Government.
- Alain Schatt & Thierry Roy, 2002. "Analyse Empirique Des Ecarts De Previsions De Benefices Dans Les Prospectus D'Introduction : Le Cas Francais," Post-Print, HAL halshs-00584529, HAL.
- Hayne E. Leland and David H. Pyle., 1976.
"Informational Asymmetries, Financial Structure, and Financial Intermediation,"
Research Program in Finance Working Papers, University of California at Berkeley
41, University of California at Berkeley.
- Leland, Hayne E & Pyle, David H, 1977. "Informational Asymmetries, Financial Structure, and Financial Intermediation," Journal of Finance, American Finance Association, American Finance Association, vol. 32(2), pages 371-87, May.
- Lee, Philip & Stokes, Donald & Taylor, Stephen & Walter, Terry, 2003. "The association between audit quality, accounting disclosures and firm-specific risk: Evidence from initial public offerings," Journal of Accounting and Public Policy, Elsevier, Elsevier, vol. 22(5), pages 377-400.
- Chen, Gongmeng & Firth, Michael & Krishnan, Gopal V., 2001. "Earnings forecast errors in IPO prospectuses and their associations with initial stock returns," Journal of Multinational Financial Management, Elsevier, Elsevier, vol. 11(2), pages 225-240, April.
- T.Y. Cheng & Michael Firth, 2000. "An Empirical Analysis of the Bias and Rationality of Profit Forecasts Published in New Issue Prospectuses," Journal of Business Finance & Accounting, Wiley Blackwell, Wiley Blackwell, vol. 27(3&4), pages 423-446.
- Mazzi, Chiara, 2011. "Family business and financial performance: Current state of knowledge and future research challenges," Journal of Family Business Strategy, Elsevier, Elsevier, vol. 2(3), pages 166-181.
- Emmanuelle Negre & Isabelle Martinez, 2012. "Une Analyse Lexicale Des Communiques De Presse Volontaires Emis Lors Des Opa/Ope : Quels Profils De Diffusion ?," Post-Print, HAL hal-00936567, HAL.
- Isabelle Martinez & Emmanuelle Negre, 2011. "Les déterminants de la communication volontaire des entreprises cibles d'OPA/OPE : le cas des synergies," Post-Print, HAL hal-00650551, HAL.
- C. Baccouche & Olfa Errais & Karima Mzoughi, 2010. "Les déterminants de la publication volontaire d'informations sociales : cas des entreprises tunisiennes," Post-Print, HAL halshs-00526423, HAL.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sandra Dupouy).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.