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Managerial Incentives And Management Forecast Precision, Qiang Cheng, Ting Luo, Heng Yue
Managerial Incentives And Management Forecast Precision, Qiang Cheng, Ting Luo, Heng Yue
Research Collection School Of Accountancy
Managers have great discretion in determining forecast characteristics, butlittle is known about how managerial incentives affect these characteristics. This paperexamines whether managers strategically choose forecast precision for self-servingpurposes. Building on the prior finding that the market reaction to vague forecasts isweaker than its reaction to precise forecasts, we find that for management forecastsdisclosed before insider sales, more positive (negative) news forecasts are more (less)precise than other management forecasts. The opposite applies to managementforecasts disclosed before insider purchases. These results are consistent withmanagers strategically choosing forecast precision to increase stock prices beforeinsider sales and to decrease stock prices before insider purchases. …
Managerial Incentives And Management Forecast Precision, Qiang Cheng, Ting Luo, Heng Yue
Managerial Incentives And Management Forecast Precision, Qiang Cheng, Ting Luo, Heng Yue
Research Collection School Of Accountancy
Managers have great discretion in determining forecast characteristics, but little is known about how managerial incentives affect these characteristics. This paper examines whether managers strategically choose forecast precision for self-serving purposes. Building on the prior finding that the market reaction to vague forecasts is weaker than its reaction to precise forecasts, we find that for management forecasts disclosed before insider sales, more positive (negative) news forecasts are more (less) precise than other management forecasts. The opposite applies to management forecasts disclosed before insider purchases. These results are consistent with managers strategically choosing forecast precision to increase stock prices before insider …
Managerial Incentives And Management Forecast Precision, Qiang Cheng, Ting Luo, Heng Yue
Managerial Incentives And Management Forecast Precision, Qiang Cheng, Ting Luo, Heng Yue
Research Collection School Of Accountancy
Managers have great discretion in determining management forecast characteristics, but little is known about how managerial incentives affect these characteristics. In this paper, we examine whether managers strategically choose the precision of their earnings forecasts for self-serving purposes. Building on prior research demonstrating that the market reaction to vague management forecasts is weaker than its reaction to precise forecasts, we find that for management forecasts disclosed before insider sales, more positive (negative) news forecasts are more (less) precise than other management forecasts. The opposite applies to management forecasts disclosed before insider purchases. These results are consistent with managers strategically choosing …