Capital Market Consequences of Managers’ Voluntary Disclosure Styles

By Holly I. Yang. 2012

155 citations recorded by the source corpus.

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.

Subfields: Accounting, Finance

View Paper: https://www.semanticscholar.org/paper/b564babdce20e1b69bfa3ddd3ca047a73a61b53b

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Citations in the corpus

Readability of Narrative Disclosures in 10-K Reports: Does Managerial Ability Matter? (2018, unknown): “For example, Habib and Hasan (2017) find that firms with more able managers over-invest in value-destroying projects that entail consumption of perquisites.”
Management Earnings Forecasts and Other Forward-Looking Statements (2017, unknown): “Yang (2012) uses earnings forecasts to study manager-specific voluntary disclosure style.”
Capital Market Consequences of Audit Partner Quality (2015, unknown): “This result is consistent with Gul, Wu, and Yang (2013), who find that audit quality varies statistically”
Managerial Incentives and Management Forecast Precision (2013, result): “13 The descriptive statistics on control variables are similar to those reported in other studies (e.g., Rogers 2008; Rogers et al. 2009; Yang 2012).”
The Effect of Managerial "Style" on the Tone of Earnings Conference Calls ∗ (2012, background): “7 The one other study that examines the market’s response to managerial style is Yang (2012).”
The Bright Side of Managerial Over-Optimism (2016, background): “10 Prior studies commonly exclude pre-announcements because these could be early announcements of actual earnings rather than predictions and they have different properties from forecasts issued before the fiscal period end (e.g., Rogers and Stocken, 2005; Ajinkya et al., 2005; Yang, 2012).”
Voluntary disclosure of non-financial information and its association with sustainability performance (2017, background): “Prior research shows that voluntary disclosure can improve stock liquidity, reduce the cost of capital, increase information intermediation, and improve earnings quality (e.g., Botosan, 1997; Botosan & Plumlee, 2002; Francis, Nanda, & Olsson, 2008; Healy, Hutton, & Palepu, 1999; Yang, 2012).”