Should I Stay or Should I Grow? Using Voluntary Disclosure to Elicit Market Feedback

• 成果类型: Article
• 署名作者: Jayaraman, Sudarshan; Wu, Joanna Shuang
• 署名单位: University of Rochester
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhz132
• 发表日期: 2020
• 页码: 3854
• 关键词: CORPORATE-INVESTMENT; stock-prices; financial-markets; INFORMATION; liquidity; sensitivity; IMPACT; FIRMS

摘要

We explore the use of voluntary disclosure by managers to solicit market feedback. Using managerial capital expenditure forecasts, we find that managers adjust annual capital expenditures upward (downward) in response to positive (negative) stock market reactions to capital expenditure forecasts, but only for those forecast announcements that stimulate rather than discourage informed trading. These capex adjustments motivated by market feedback correlate with higher future performance and are stronger (weaker) when outsiders (managers) are more informed. Finally, we show that managers are more likely to issue and learn from capex forecasts when predisclosure stock prices are affected by transitory nonfundamental shocks.