Journal of International Business Studies

, Volume 50, Issue 1, pp 48–82 | Cite as

Country-level institutions and management earnings forecasts

  • Wenjing Li
  • Jeff Ng
  • Albert TsangEmail author
  • Oktay Urcan


Using a comprehensive sample hand-collected from the original texts of management earnings forecasts from 27 countries, we provide descriptive evidence on the country-level institutional determinants and economic consequences of forecast characteristics. Using principal component factors constructed from a number of country-level institutional variables, we find that forecast disaggregation, frequency, precision, and attribution vary significantly with the business and accounting environment of a country. We further document that better quality management forecasts are generally associated with stronger stock market reactions and higher investment efficiency. Together, our findings suggest that country-level institutions play a vital role in voluntary disclosure characteristics.


voluntary disclosure management forecasts investment efficiency 


À l’aide d’un large échantillon prélevé manuellement à partir des textes originaux sur les prévisions de revenus managériaux de 27 pays, nous fournissons des données descriptives sur les déterminants institutionnels au niveau national et les conséquences économiques des caractéristiques de prévision. En utilisant les principaux facteurs construits à partir d’un certain nombre de variables institutionnelles nationales, nous constatons que la désagrégation, la fréquence, la précision et l’attribution des prévisions varient considérablement selon l’environnement managérial et comptable d’un pays. Nous prouvons, en outre, qu’une meilleure qualité des prévisions de gestion est généralement associée à des réactions plus fortes des marchés boursiers et à une plus grande efficacité des investissements. Parallèlement, nos conclusions suggèrent que les institutions nationales jouent un rôle vital sur les caractéristiques de la divulgation volontaire d’informations.


Usando una muestra completa recolectada manualmente de textos originales de los pronósticos de ganancias de gestión en 27 países, damos evidencia descriptiva a nivel nacional sobre los determinantes institucionales y las consecuencias económicas de las características del pronóstico. Usando los factores componentes principales construidos a partir de una serie de variables institucionales a nivel país, encontramos que la desagregación, la frecuencia, la precisión, y la atribución del pronóstico varía significativamente con el entorno empresarial y contable de un país. Además, documentamos que los pronósticos de gestión de calidad son generalmente asociados con reacciones más fuertes del mercado de valores y mayor eficiencia de inversión. Juntos, nuestros resultados sugieren que las instituciones a nivel nacional de un país juegan un papel vital en las características de divulgación voluntaria.


Usando uma amostra abrangente coletada manualmente de textos originais sobre previsões de ganhos gerenciais de 27 países, fornecemos evidências descritivas sobre determinantes institucionais em nível de país e consequências econômicas das características da previsão. Utilizando fatores de componentes principais construídos a partir de diversas variáveis institucionais no nível do país, descobrimos que a desagregação, a frequência, a precisão e a atribuição de previsões variam significativamente com o ambiente comercial e contábil de um país. Além disso, documentamos que melhores previsões de gestão da qualidade estão geralmente associadas a fortes reações do mercado de ações e maior eficiência do investimento. Em conjunto, nossos resultados sugerem que as instituições em nível de país desempenham um papel vital nas características da divulgação voluntária.





The authors gratefully acknowledge the insightful comments of Gary Biddle (Editor) and two anonymous reviewers. We also acknowledge the helpful comments of seminar participants at the 2014 Global Issues in Accounting Conference, hosted by the University of Chicago Booth School of Business and the University of North Carolina Kenan-Flagler School of Business; the 9th Annual Conference of Asia–Pacific Financial Markets; the 2015 Financial Accounting and Reporting Section Midyear Meeting; the 2015 European Accounting Association Annual Congress; the 2015 American Accounting Association Annual Meeting; the 2015 Auckland Finance Meeting; and 1st Capital Market-Based Accounting Research Conference in Münster. We also gratefully acknowledge the financial support of the National Natural Science Foundation of China (Approval Nos. 71772078) and GDHVPS (2016).


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Copyright information

© Academy of International Business 2018

Authors and Affiliations

  • Wenjing Li
    • 1
  • Jeff Ng
    • 2
  • Albert Tsang
    • 3
    Email author
  • Oktay Urcan
    • 4
  1. 1.Jinan UniversityGuangzhouPeople’s Republic of China
  2. 2.The Chinese University of Hong KongShatinHong Kong
  3. 3.York University and Hong Kong Baptist UniversityNorth YorkCanada
  4. 4.University of Illinois at Urbana-ChampaignChampaignUSA

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