Publication Type
Journal Article
Version
acceptedVersion
Publication Date
9-2023
Abstract
This paper investigates whether the use of Big Data analytics by firms has a spillover effect on management forecasting behavior. Insights provided by Big Data could potentially improve firms’ ability to forecast earnings (supply channel) and investor demand for earnings information is likely higher for firms engaging in data analytics (demand channel). Using a text-based measure of firms’ commitments to and usage of Big Data analytics, we find that Big Data analytics usage is positively associated with the propensity to issue management earnings forecasts. Consistent with the “supply channel” explanation, we find that Big Data analytics usage is positively associated with management forecast accuracy as well. Also, supporting the “demand channel” explanation, we find that Big Data analytics usage is associated with greater analyst following. Our findings of improved disclosure following commitments to Big Data analytics highlight a potentially unintended benefit of the Big Data revolution.
Keywords
Big data, data analytics, management forecasts, voluntary disclosure
Discipline
Accounting | Corporate Finance
Research Areas
Corporate Reporting and Disclosure
Publication
Accounting Horizons
First Page
1
Last Page
18
ISSN
0888-7993
Identifier
10.2308/HORIZONS-2020-145
Publisher
American Accounting Association
Citation
GOH, Beng Wee; LI, Na; and RANASINGHE, Tharindra.
Big data analytics and management forecasting behavior. (2023). Accounting Horizons. 1-18.
Available at: https://ink.library.smu.edu.sg/soa_research/2016
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.2308/HORIZONS-2020-145