Journal article
Managerial Learning from Analyst Feedback to Voluntary Capex Guidance, Investment Efficiency and Firm Performance
Jihun Bae, Gary Biddle, Chul W Park
Management Science | Institute for Operations Research and Management Sciences | Published : 2022
Abstract
We test predictions that managers issuing voluntary capex guidance learn from analyst feedback and that this learning enhances investment efficiency and firm performance (Langberg and Sivaramakrishnan, 2010). Our findings are consistent with these predictions. First, we find that managers’ capex adjustments and capex guidance revisions relate positively with analyst feedback measured by differences between post-guidance analyst capex forecasts and managerial capex guidance. Second, changes in investment efficiency relate positively with analyst feedback. Third, subsequent firm financial performance relates positively with the predicted values of both managers’ capex adjustments and capex gui..
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Funding Acknowledgements
The authors appreciate helpful comments from the editor, associate editor, two anonymous reviewers, and seminar participants at the American Accounting Association Annual Meetings, Erasmus University Rotterdam, Korea Advanced Institute of Science and Technology, Tilburg University, the University of Hong Kong, and the University of Melbourne. They also acknowledge and appreciate Institutional Investor Magazine All-America Research Team Awards data shared by Michael Jung, StreetEvents data provided by the University of Melbourne Centre for Corporate Governance and Regulation, and related expert data analysis provided by James Peter Kavourakis.