The debt market relevance of management earnings forecasts: evidence from before and during the credit crisis

• 成果类型: Article
• 署名作者: Shivakumar, Lakshmanan; Urcan, Oktay; Vasvari, Florin P.; Zhang, Li
• 署名单位: University of London; London Business School; Rutgers University System; Rutgers University New Brunswick
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-011-9155-6
• 发表日期: 2011
• 页码: 464-486
• 关键词: BAD-NEWS; information-content; default swap; STOCK; QUALITY; IMPACT

摘要

We investigate the credit market's response via changes in credit default swap (CDS) spreads to management earnings forecasts and evaluate the importance of these forecasts relative to earnings news during the periods before and during the recent credit crisis. We document that credit markets react significantly to management forecast news and that the reactions to forecast news are stronger than to actual earnings news. Consistent with the asymmetric payoffs to debt holders, the forecast news is mainly relevant for firms with poor credit rating or announcing bad news. We also show that the relevance of management forecasts to credit markets is particularly strong during periods of high uncertainty, as experienced during the recent credit crisis.