The effects of a mixed approach toward management earnings forecasts: Evidence from China
研究中国强制与自愿混合的盈利预测制度，发现强制预测有信息含量，能促进后续自愿预测，但也会诱发盈余管理以避免触发强制披露门槛。
Abstract Chinese regulators mandate management earnings forecasts when managers’ earnings expectations meet bright‐line thresholds and allow voluntary forecasts in other circumstances. We examine the effects of this mixed approach. We find that Chinese mandatory forecasts have significant information content. Moreover, we observe a learning effect: mandatory forecasts appear to stimulate voluntary forecasts in subsequent periods as managers become familiar with the forecasting and disclosing procedures through forced experience. We find one negative consequence of the mixed approach, however: managers appear to manipulate earnings to avoid the forecast threshold of large earnings decreases. Overall, we document the pros and cons of a mixed approach toward management earnings forecasts in a major emerging market.