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Meeting or Beating Analysts’ Forecasts: Empirical Evidence of Firm’s Characteristics, and Persistence Patterns

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Authors
CHOI, TAE H.
Issue Date
2010-12
Publisher
College of Business Administration (경영대학)
Citation
Seoul Journal of Business, Vol.16(2): 3~38
Keywords
Analysts’ forecastsearnings managementforecast managementSarbanes-Oxley Actfirm characteristics
Abstract
Focusing on the MBE (meeting or beating analysts’ forecast) phenomenon,
this study primarily investigates the way market responds to a firm’s
repeated MBE and to its first failure to meet analysts’ forecast after a
long string of MBE. The paper also asks whether the market’s reaction to
the MBE patterns has changed after the regulatory reform including the
Sarbanes-Oxley Act and investigates the properties of habitual MBE firms.
The results show the market rewards persistent MBE firms and that it
seems to efficiently interpret a systematic portion of earnings surprise for
habitual beaters. They also document that the post-SOX stock market
premium to MBE has not completely diminished and that MBE patterns are
strongly associated with firm characteristics.
ISSN
1226-9816
Language
English
URI
http://hdl.handle.net/10371/75576
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College of Business Administration/Business School (경영대학/대학원)Dept. of Business Administration (경영학과)Seoul Journal of BusinessSeoul Journal of Business Volume 16, Number 1/2 (2010)
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