Internal Forecasts in Multi-Location Firms

• 成果类型: Article; Early Access
• 署名作者: Gallo, Lindsey; Labro, Eva; Omartian, James d.
• 署名单位: University of Michigan System; University of Michigan; University of North Carolina; University of North Carolina Chapel Hill; University of North Carolina School of Medicine
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/1475-679X.70003
• 发表日期: 2025
• 关键词: MANAGERIAL; uncertainty

摘要

We investigate the dynamics of internal forecasting in multi-location firms and the relations between forecast characteristics and investment. Using U.S. Census microdata on plant-level growth expectations, we find that plants within multi-location firms make forecasts that are both more certain and less accurate than those of standalone plants. We provide evidence suggesting that headquarters infers uncertainty from inter-plant forecast disagreement, and that headquarters is able to facilitate the use of relevant information held by one plant but applicable to another. Differences between peer and focal plants' forecasts predict forecast errors and relate to investment decisions at the focal plant, suggesting that information from multiple sources is integrated into capital allocation decisions. Headquarters' heavier use of peer plant forecast information when focal plants are more uncertain likely weakens focal plant managers' incentives to consider extreme scenarios when forecasting.