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Country-level institutions and management earnings forecasts

Author

Listed:
  • Wenjing Li

    (Jinan University)

  • Jeff Ng

    (The Chinese University of Hong Kong)

  • Albert Tsang

    (York University and Hong Kong Baptist University)

  • Oktay Urcan

    (University of Illinois at Urbana-Champaign)

Abstract

Using a comprehensive sample hand-collected from the original texts of management earnings forecasts from 27 countries, we provide descriptive evidence on the country-level institutional determinants and economic consequences of forecast characteristics. Using principal component factors constructed from a number of country-level institutional variables, we find that forecast disaggregation, frequency, precision, and attribution vary significantly with the business and accounting environment of a country. We further document that better quality management forecasts are generally associated with stronger stock market reactions and higher investment efficiency. Together, our findings suggest that country-level institutions play a vital role in voluntary disclosure characteristics.

Suggested Citation

  • Wenjing Li & Jeff Ng & Albert Tsang & Oktay Urcan, 2019. "Country-level institutions and management earnings forecasts," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(1), pages 48-82, February.
    • Handle: RePEc:pal:jintbs:v:50:y:2019:i:1:d:10.1057_s41267-018-0190-4
    DOI: 10.1057/s41267-018-0190-4
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