How does investor relations disclosure affect analysts' forecasts?

Authors

Millicent M. Chang, University of Western AustraliaFollow
Liyin Hooi, University of Western Australia
Marvin Wee, University of Western Australia

RIS ID

119597

Publication Details

Chang, M., Hooi, L. & Wee, M. (2014). How does investor relations disclosure affect analysts' forecasts?. Accounting and Finance, 54 (2), 365-391.

Abstract

We study the relationship between investor relations disclosure and analyst forecast properties in Australian firms, a setting dominated by small firms with limited analyst coverage and requiring continuous disclosure of price sensitive information. We find increasing disclosure in the time period investigated is associated with greater accuracy in firms disclosing fewer items. Disclosure was unrelated to forecast dispersion, possibly due to the low analyst following. In periods of uncertainty, the investor relations awards effectively discriminated quality from quantity of disclosure. These findings highlight the importance of active communication with analysts, particularly in firms providing less disclosure and during periods of uncertainty. 2013 AFAANZ.