Publication Type

Journal Article

Publication Date

2012

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.

Keywords

Management credibility, Earnings guidance, Management forecasts, Management styles

Discipline

Accounting | Corporate Finance

Research Areas

Corporate Reporting and Disclosure

Publication

Journal of Accounting and Economics

Volume

53

Issue

1-2

First Page

167

Last Page

184

ISSN

0165-4101

Identifier

10.1016/j.jacceco.2011.08.003

Publisher

Elsevier

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