Loading...
Please wait, while we are loading the content...
Similar Documents
Customer-Supplier Relationships and Management Earnings Forecasts
| Content Provider | Semantic Scholar |
|---|---|
| Copyright Year | 2018 |
| Abstract | This paper examines whether customer base composition, i.e., whether a firm’s major customers comprise of government entities or publicly traded companies in the U.S., affects the properties of supplier’s management earnings forecasts. Using a sample of 1,168 management earnings forecasts from 1998 through 2014, we find that firms whose major customers are government entities, i.e., government suppliers, issue more precise management earnings forecasts than firms whose major customers are public companies, i.e., corporate suppliers. Moreover, when managers disclose new material information to the market, government suppliers issue more accurate earnings forecasts than corporate suppliers. Finally, earnings forecasts issued by government suppliers have greater price impact than those issued by corporate suppliers, but only when companies miss analysts’ consensus forecast. Collectively, the results demonstrate that having government as a major customer enables supplier firms to issue high-quality earnings forecasts, thus supporting the government effect hypothesis more so than the information spillover hypothesis. Our focus on the dichotomous customer types provides new insight on the impact of government contract on private sector disclosure quality. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | http://www.sif.zju.edu.cn/public/meeting/file/Customer-Supplier%20Relationships%20and%20Management%20Earnings%20Forecasts.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
