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.
Management credibility, Earnings guidance, Management forecasts, Management styles
Accounting | Corporate Finance
Corporate Reporting and Disclosure
Journal of Accounting and Economics
Capital Market Consequences of Managers' Voluntary Disclosure Styles. (2012). Journal of Accounting and Economics. 53, (1-2), 167-184. Research Collection School Of Accountancy.
Available at: http://ink.library.smu.edu.sg/soa_research/1159