Research On Management Earnings Pre-announcements Disclosure Strategy And Its Economic Consequences

Management earnings pre-announcements have been a hot theoretical and practical topic. Because information embodied in such pre-announcements plays a key role in security pricing and investment decision-making process, the problem of how to interpret and regulate this type of information disclosure becomes a very important research issue.This dissertation analyzes management earnings pre-announcements disclosure strategic behavior and its economic consequences. We begin with the investigation of managers' decisions about how to disclose earnings pre-announcements in terms of precision. Investigation of this specificity choice can yield insights into management disclosure strategy. We then try to analyze the determinants of management earnings pre-announcements precision, and examine the consequences of management earnings pre-announcements precision, including accuracy, news conveyed by such pre-announcements (relative to investors' expectations).On the methodology, we try to combine normative and positive research together and regard positive research as principle. In summary, the main findings of this study are as follows:1. Firms with large size, short horizon, good-news are more likely to issue precise pre-announcements. However, firms with efficient governance mechanism are less likely to issue precise pre-announcements due to legal liability.2. Managers do have certain pattern of bias in earnings pre-announcements. When they disclose good news, managers have conservative bias. When they disclose bad news, managers have optimistic bias. The accuracy of management earnings pre-announcements is associated with the horizon of pre-announcements and the effectiveness of the firms' corporate governance structure. And the accuracy differs depending on the precision and the type of pre-announcements.3. Price reactions occur when management earnings pre-announcements are released, suggesting that news conveyed by the pre-announcements adjusts investors' expectations and reduces the information asymmetry. The precision of earnings pre-announcements seems to cause differential price reactions. The more precise the earnings pre-announcements are, the larger price reactions occur.The main contributions of this dissertation include: (1) this is the first domestic study that provides evidence on the antecedents and outcomes associated with the element of management earnings pre-announcements disclosure strategy: precision; (2) this is the first domestic study that analyzes the primary factors influencing management earnings pre-announcements precision in Chinese listed firms; (3) this is the first domestic study that extends research in this field by assessing whether the direction and magnitude of forecast error (relative to realized earnings) differ across specificity categories; (4) this study also extends the line of research on market reactions to earnings pre-announcements.