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Analysts’ cash flow forecasts and firms’ information environment: evidence from bid-ask spread

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  • Mengyu Ma

Abstract

Purpose - This study aims to investigate whether the cash flow forecasts (CFF) of analysts can disseminate valuable information to the information environments of companies. Design/methodology/approach - The author uses empirical archival methodology to conduct differences-in-difference analyses. Findings - It is found that information asymmetry decreases in the treatment group following the initiation of CFF during the postperiod, which is consistent with the hypothesis of this paper. Originality/value - To the best of the author’s knowledge, this study is the first among the cash flow forecast studies to demonstrate the usefulness of CFF in the mitigation of information asymmetry, a friction that is widespread in capital markets.

Suggested Citation

  • Mengyu Ma, 2024. "Analysts’ cash flow forecasts and firms’ information environment: evidence from bid-ask spread," International Journal of Accounting & Information Management, Emerald Group Publishing Limited, vol. 32(3), pages 430-446, January.
    • Handle: RePEc:eme:ijaimp:ijaim-10-2023-0265
    DOI: 10.1108/IJAIM-10-2023-0265
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