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Capital market consequences of managers' voluntary disclosure styles

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  • Yang, Holly I.

Abstract

This paper studies the capital market consequences of managers establishing an individual forecasting style. Using a manager-firm matched panel dataset, I examine whether and when manager-specific credibility matters. If managers' forecasting styles affect their perceived credibility, then the stock price reaction to forecast news should increase with managers' prior forecasting accuracy. Consistent with this prediction, I find that the stock price reaction to management forecast news is stronger when information uncertainty is high and when the manager has a history of issuing more accurate forecasts, indicating that individual managers benefit from establishing a personal disclosure reputation.

Suggested Citation

  • Yang, Holly I., 2012. "Capital market consequences of managers' voluntary disclosure styles," Journal of Accounting and Economics, Elsevier, vol. 53(1), pages 167-184.
  • Handle: RePEc:eee:jaecon:v:53:y:2012:i:1:p:167-184 DOI: 10.1016/j.jacceco.2011.08.003
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Dongyoung Lee, 2017. "Corporate Social Responsibility and Management Forecast Accuracy," Journal of Business Ethics, Springer, pages 353-367.
    2. repec:spr:reaccs:v:22:y:2017:i:3:d:10.1007_s11142-017-9396-0 is not listed on IDEAS
    3. repec:spr:reaccs:v:22:y:2017:i:2:d:10.1007_s11142-017-9391-5 is not listed on IDEAS
    4. Hope, Ole-Kristian & Ma, Mark (Shuai) & Thomas, Wayne B., 2013. "Tax avoidance and geographic earnings disclosure," Journal of Accounting and Economics, Elsevier, pages 170-189.
    5. Michał Dzieliński & Alexander F. Wagner & Richard J. Zeckhauser, 2017. "Straight Talkers and Vague Talkers: The Effects of Managerial Style in Earnings Conference Calls," NBER Working Papers 23425, National Bureau of Economic Research, Inc.
    6. Vashishtha, Rahul, 2014. "The role of bank monitoring in borrowers׳ discretionary disclosure: Evidence from covenant violations," Journal of Accounting and Economics, Elsevier, pages 176-195.
    7. repec:eee:intfor:v:33:y:2017:i:3:p:605-617 is not listed on IDEAS
    8. Ying Cao & Linda A. Myers & Albert Tsang & Yong George Yang, 0. "Management forecasts and the cost of equity capital: international evidence," Review of Accounting Studies, Springer, vol. 0, pages 1-48.
    9. Hilary, Gilles & Hsu, Charles & Segal, Benjamin & Wang, Rencheng, 2016. "The bright side of managerial over-optimism," Journal of Accounting and Economics, Elsevier, pages 46-64.

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