Management Earnings Forecasts, Information Asymmetry, and Liquidity: An Empirical Investigation
Links to Fileshttps://www.researchgate.net/profile/Mikhail_Pevzner/publication/228258370_Management_Earnings_Forecasts_Information_Asymmetry_and_Liquidity_An_Empirical_Investigation/links/0a85e533f2f96b4b3b000000/Management-Earnings-Forecasts-Information-Asymmetry-and-Liquidity-An-Empirical-Investigation.pdf
MetadataShow full item record
Type of Work65 pages
Citation of Original PublicationPevzner, Mikhail, Management Earnings Forecasts, Information Asymmetry, and Liquidity: An Empirical Investigation (July 2007).
This study investigates (1) whether forecasting firms have lower liquidity prior to the issuance of a management-earnings forecast than non-forecasting firms and (2) whether forecasting earnings has a persistent affect on a firm's liquidity. I find that, first, forecasting firms have greater liquidity in the period prior to a forecast. Second, while issuing forecast increases liquidity in over short windows, this effect is not significant over longer windows. Third, initiating or ceasing the issuance of earnings forecasts has no significant long-term effect on the firm's liquidity. Combined, these results suggest that management earnings forecasting decision does not appear to be driven by liquidity-improvement goals, and that management earnings forecasts do not appear to strongly affect firms' liquidity.