Are Management Earnings Forecasts in China Credible to the Stock Market
研究中国强制盈利预测制度下，预测修正如何损害未来预测的可信度，为监管政策提供实证依据。
In contrast to the voluntary management earnings forecast practice in the western countries,the Chinese Securities Regulatory Committee requires Chinese companies issue earnings forecast in the third-quartet report if the annual earnings are foreseen to be in a certain range.However,these forecasts are often times followed with frequent forecast revisions.This paper examines the impact of forecast revisions on the credibility of management earnings forecast The results show that both management earnings forecasts and forecast revisions contain significant information,and more so for earnings forecast issued after the fiscal year-ends.However, the fact that companies revise previous forecasts will significantly damage the credibility of future forecasts and to a larger degree for firms that revise forecasts frequently in the past three years and recently.This paper provides empirical evidence on the economic consequences of mandatory earnings forecast policy and provides important implications for the regulatory policy on the information disclosure in the Chinese stock market.