Investor Sentiment and Corporate Disclosure

• 成果类型: Article
• 署名作者: Bergman, Nittai K.; Roychowdhury, Sugata
• 署名单位: Massachusetts Institute of Technology (MIT)
• 刊物名称: JOURNAL OF ACCOUNTING RESEARCH
• ISSN/ISSBN: 0021-8456
• DOI: 10.1111/j.1475-679X.2008.00305.x
• 发表日期: 2008
• 页码: 1057-1083
• 关键词: MANAGEMENT EARNINGS FORECASTS; STOCK OPTION AWARDS; discretionary disclosure; information-content; cross-section; returns; expectations; incentives; prices; FIRMS

摘要

This paper investigates how firms react strategically to investor sentiment via their disclosure policies in an attempt to influence the sentiment-induced biases in expectations. Proxying for sentiment using the Michigan Consumer Confidence Index, we show that during low-sentiment periods, managers increase forecasts to walk up current estimates of future earnings over long horizons. In contrast, during periods of high sentiment, managers reduce their long-horizon forecasting activity. Further, while there is an association between sentiment and the biases in analysts' estimates of future earnings, management disclosures vary with sentiment even after controlling for analyst pessimism, indicating that managers attempt to communicate with investors at large, and not just analysts. Our study provides evidence that firms' long-horizon disclosure choices reflect managers' desire to maintain optimistic earnings valuations.