Management Forecast Quality and Capital Investment Decisions
研究了管理层对外盈利预测的质量能否反映其内部投资决策的质量，发现预测质量越高的管理者，其收购和资本支出决策也越好。
ABSTRACT Corporate investment decisions require managers to forecast expected future cash flows from potential investments. Although these forecasts are a critical component of successful investing, they are not directly observable by external stakeholders. In this study, we investigate whether the quality of managers' externally reported earnings forecasts can be used to infer the quality of their corporate investment decisions. Relying on the intuition that managers draw on similar skills when generating external earnings forecasts and internal payoff forecasts for their investment decisions, we predict that managers with higher quality external earnings forecasts make better investment decisions. Consistent with our prediction, we find that forecasting quality is positively associated with the quality of both acquisition and capital expenditure decisions. Our evidence suggests that externally observed forecasting quality can be used to infer the quality of capital budgeting decisions within firms. JEL Classifications: D83, G31, M41 Data Availability: Data are available from public sources identified in the paper.