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- Publisher Website: 10.1007/s11142-012-9217-4
- Scopus: eid_2-s2.0-84888029643
- WOS: WOS:000327145500003
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Article: Management forecast credibility and underreaction to news
Title | Management forecast credibility and underreaction to news |
---|---|
Authors | |
Keywords | Credibility Market efficiency Voluntary disclosure |
Issue Date | 2013 |
Citation | Review of Accounting Studies, 2013, v. 18, n. 4, p. 956-986 How to Cite? |
Abstract | In this paper, we first document evidence of underreaction to management forecast news. We then hypothesize that the credibility of the forecast influences the magnitude of this underreaction. Relying on evidence that more credible forecasts are associated with a larger reaction in the short window around the management forecasts and a smaller post-management forecast drift in returns, we show that the magnitude of the underreaction is smaller for firms that provide more credible forecasts. Our paper contributes to the literature by providing out-of-sample evidence of the drift in returns documented in the post-earnings-announcement drift literature, with the credibility of the news being one explanation for the phenomenon. © 2013 Springer Science+Business Media New York. |
Persistent Identifier | http://hdl.handle.net/10722/315238 |
ISSN | 2023 Impact Factor: 4.8 2023 SCImago Journal Rankings: 5.481 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Ng, Jeffrey | - |
dc.contributor.author | Tuna, Irem | - |
dc.contributor.author | Verdi, Rodrigo | - |
dc.date.accessioned | 2022-08-05T10:18:10Z | - |
dc.date.available | 2022-08-05T10:18:10Z | - |
dc.date.issued | 2013 | - |
dc.identifier.citation | Review of Accounting Studies, 2013, v. 18, n. 4, p. 956-986 | - |
dc.identifier.issn | 1380-6653 | - |
dc.identifier.uri | http://hdl.handle.net/10722/315238 | - |
dc.description.abstract | In this paper, we first document evidence of underreaction to management forecast news. We then hypothesize that the credibility of the forecast influences the magnitude of this underreaction. Relying on evidence that more credible forecasts are associated with a larger reaction in the short window around the management forecasts and a smaller post-management forecast drift in returns, we show that the magnitude of the underreaction is smaller for firms that provide more credible forecasts. Our paper contributes to the literature by providing out-of-sample evidence of the drift in returns documented in the post-earnings-announcement drift literature, with the credibility of the news being one explanation for the phenomenon. © 2013 Springer Science+Business Media New York. | - |
dc.language | eng | - |
dc.relation.ispartof | Review of Accounting Studies | - |
dc.subject | Credibility | - |
dc.subject | Market efficiency | - |
dc.subject | Voluntary disclosure | - |
dc.title | Management forecast credibility and underreaction to news | - |
dc.type | Article | - |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.1007/s11142-012-9217-4 | - |
dc.identifier.scopus | eid_2-s2.0-84888029643 | - |
dc.identifier.volume | 18 | - |
dc.identifier.issue | 4 | - |
dc.identifier.spage | 956 | - |
dc.identifier.epage | 986 | - |
dc.identifier.isi | WOS:000327145500003 | - |