1,720,965 research outputs found
Essays on management earnings forecasts
Get PDFThe purpose of the dissertation is to shed light on the iterative nature of management earnings forecasts characteristics by means of a new measure of consistency and to provide empirical evidence on both the cross-sectional determinants of the measure and its effects on the information environment. More precisely, the dissertation investigates i) the role of firm-specific variables in explaining the decision of keeping the set of management earnings forecasts characteristics constant over time; ii) whether the activity of financial analysts is sensitive to the consistency of a given set of earnings forecasts characteristics, and iii) potentially opportunistic disclosure practices whenever a company fails to meet market expectations through management earnings forecasts in a subsequent period
An examination of the determinants of Management Earnings Forecasts Consistency
No full textThis paper examines whether firms engage in consistent pattern of management earnings forecast characteristics and which determinants most likely explain the phenomenon. Building on previous literature on guidance characteristics, I develop a measure of consistency considering three attributes: precision, level of disaggregation and additional qualitative information. I classify firm as “consistent” based on persistence of characteristics over time. The paper investigates management earnings forecasts from a cross-sectional perspective and attempts to shed new light on the iterative nature of management earnings forecasts characteristics which appear to be the least well-understood component of the forecasting activity. Preliminary results suggest that the experience of the CEO and the cumulative abnormal returns contribute to justify the choice of providing earnings forecasts with identical characteristics from one year to the next
Consequences of Management Earnings Forecast Consistency
No full textThis paper investigates the effects of consistent disclosure of management earnings forecast characteristics on the information environment. Building on previous literature on guidance characteristics, I focus on a new measure of consistency based on three attributes: precision, level of disaggregation and additional qualitative information. I classify firms as “consistent” based on persistence of characteristics over time, and exploit two different settings: one to test the incremental level of consistency (firm-based consistency) and the other to test consistency at the individual level. The paper studies management earnings forecasts’ consistency from a longitudinal perspective to examine its effect on the properties of financial analysts, while previous studies on dynamic disclosure only assess the extent to which firms’ behavior in the past affect the likelihood of providing voluntary disclosure in the future. Preliminary results suggest that a strong level of consistency positively affects a firm’s information environment, helping analysts to align their expectations with managers. When looking at individual consistent characteristics, the positive effect on analysts dispersion seems to be driven by all the three characteristics but with a larger impact of consistency in precision. Accuracy is positively influenced by consistency in the level of disaggregation, while analysts coverage increases are attributable to the level of precision being unchanged from year to year
Business Model in IPO Prospectuses: insights from Italian Innovation Companies in Business Models
No full textHow do companies to be listed deal with the voluntary disclosure of their business model? Is it true that firms with greater intellectual capital resources and technological innovation endowments are less prone to full disclosure? This paper aims to examine the choices of voluntary disclosure of the business model made by three Italian manufacturing companies in initial public offering prospectuses. The objective is to explore whether any differences exist and may be related to the type of innovation underlying the firms’ business model. A series of interviews with the top management allows to deeply understand the business model of each company. A content analysis allows to measure the level of disclosure and identify the strategic concepts of the business model and their relevance. The study provides evidence that companies with a business model based on technology-push and design-driven innovation have a lower propensity to the full disclosure of their intangible resources, particularly of those based on knowledge as some could be also invisible. The paper contributes to the ongoing debate on the role of business and financial reporting
Do firms use early guidance to disclose the effect of conservatism on future earnings?
No full textPurpose: By deferring profits and anticipating losses, conservatism makes earnings increases more persistent and earnings declines more likely to revert. Therefore, the level of conservatism in current earnings has implications for future earnings expectations. Past research shows that outsiders can fail to understand these implications. This paper aims to investigate whether firms help outsiders by voluntarily disclosing their expectations about how conservatism will affect future earnings trends. Design/methodology/approach: The authors examine the likelihood and content of “early” earnings guidance – i.e. guidance about future earnings that is released around or before the announcement of current earnings. The sample is made of 8,820 annual earnings announcements, 62 per cent of which are combined with early guidance. Findings: The authors find that the more conservative current earnings, the higher: the likelihood that the firm releases early guidance; the likelihood that the firm predicts a positive change in earnings; and the difference between the forecasted earnings and current earnings. The authors also find such guidance to be relevant to analysts, who use it to update their forecasts. Practical implications: By showing that firms use early guidance to disclose the effect of conservatism on future earnings, the study is interesting to users and preparers because it shows that analysts need and use such disclosure; and regulators because it alleviates concerns about the information consequences of conservatism. Originality/value: The findings show that firms do not refrain from committing to positive early guidance to disclose the earnings effects of conservatism. This is interesting in light of the difficulty of predicting such effects, the manager incentives to keep expectations low and the cost of committing to positive guidance instead of less risky qualitative disclosure alternatives. In this way, the authors contribute to the literature on the interrelation between voluntary disclosure and conservatism in financial reports
La disclosure volontaria del modello di business nel prospetto informativo di quotazione: un’analisi comparative
Get PDFHow do companies to be listed actually deal with voluntary disclosure of their business model? Is it true that firms with greater knowledge-based resources and technological innovation endowments have a lower propensity to adopt fully open communication behaviors? This paper aims to identify the voluntary disclosure policies adopted by three Italian companies in their Initial Public Offering (IPO) prospectuses in order to investigate whether any differences may depend on the type of innovation underlying each business model. A series of interviews conducted with the top management made it possible to understand more deeply the business model of each company. Further, a content analysis has been developed to compute a measure of disclosure and to point out the strategic concepts and their relevance. We provide evidence that companies with a business model based on technology-push innovation have a lower propensity to the full disclosure of their intangible components, particularly of those mainly based on knowledge as these are also invisible. Our study adds to the literature of business and financial reporting by focusing on a new object of inquiry, that is the business model. The business model plays an important role in allowing external actors to understand a company’s value, thus companies’ strategic communication should be shaped accordingly. The results suggest the need to address the issue of voluntary disclosure of the business model by first distinguishing “visible” intangible resources from those that are “invisible” (both to financial and competitive markets). The study aims to make a contribution to the ongoing debate on business and financial reporting practice
Voluntary Disclosure of the Business Model in Italian IPO Prospectuses: a Comparative Analysis
No full textStrategic Philanthropy: Analysis of "Ex-Ante" and "Ex-Post" Perceptions in Foundation Governance
No full text
Social media disclosure and reputational damage
Get PDFWe provide new evidence on the effects of social media in the context of a financial scandal using a sample of banks that were accused of manipulating the London Interbank Offered Rate (LIBOR). We find that increased bank Twitter activity when the scandal surfaced has a positive moderating effect on returns. However, the dissemination of content op- erated by social media users has a negative counterbalancing effect, thus amplifying the impact of the scandal. In particular, tweets that are characterized by positive sentiment contribute to exacerbating the reputational damage suffered by banks. We contribute to the emerging literature on the role of social media on capital markets
- …
