Will Investor Sentiment Affect The Reliability Of Management's Earning Forecasts?

Previous studies have shown that investor sentiment has many economic consequences,which can not only influence the decision of asset prices in the market,but also influence the behavioral decisions of listed company management to some extent.Since the earning forecast of the management of listed companies is an important source of investor information,its reliability will directly affect the expectations of investors and affect their investment decisions,which is related to the vital interests of investors.Based on the purpose of safeguarding investors' rights and interests,this paper attempts to explore the relationship between investor sentiment and management earnings forecast in China,in order to play a role of guidance to investors,listed company management and regulatory authorities.This paper first reviews and analyzes the background and status quo of China's management earning forecasting system,and gives a general presentation on its development trend: In recent years,China's listing performance forecasting system has become more sophisticated and flexible,and more and more predictive colors.The proportion of disclosed earnings forecasts in the management of listed companies has been increasing year by year.After this,this paper reviews the previous literatures on investor sentiment and management earnings forecast,and based on the literature,derives several core issues of this paper,namely the accuracy and deviation of investor sentiment on management earnings forecast.The impact,and whether such bias formation has the effect of subjective intentionality and uncertainty on such bias.In empirical research,this paper uses principal component analysis to construct investor sentiment factors,uses dummy variables to assign different forms of forecast release,and measures the difference between management earnings forecasting accuracy and management earnings forecast and real profit.The value measures the management's profit forecast deviation.After regression analysis,this paper finds that the management profit forecast accuracy is negatively correlated with investor sentiment,and the management earnings forecast optimistic bias is positively correlated with investor sentiment.In order to explore whether the influence of investor sentiment on management's earnings forecast bias is intentional,this paper studies the characteristics of management's earnings forecast in the quarter of the market with the lowest market sentiment,and the development of investor sentiment tends to be released during the downturn.A pessimistic forecast of earnings.In order to study whether uncertainty will amplify the impact of investor sentiment on management's earnings forecast bias,this paper analyzes the sample uncertainty based on several sets of criteria that represent the company's uncertainty,and observes the investor's sentiment one by one.Impact on management's earnings forecast bias.The research in this paper shows that there is a significant negative correlation between investor sentiment and management earnings forecast accuracy.When capital market investors are depressed,the company's management usually draws more accurate methods for profit forecasting.With the rise of investor sentiment,the accuracy of the management's earnings forecast will decrease;there is a significant positive correlation between investor sentiment and the optimistic bias of management's earnings forecast,that is,with market sentiment High,the optimism of management's earnings forecast will increase with the increase of investor sentiment;the annual profit forecast of listed company management is more pessimistic during the market downturn than during normal mood,which indicates the emotionally related management profit forecast Deviations may be unintentional because managers lack incentives to further tighten stock prices during periods of corporate share price pressure;positive correlations between management earnings forecast bias and investor sentiment for companies with higher uncertainty More intense,which shows that as the company's uncertainty increases,the difficulty of management's profit forecast will increase,facing moreThe difficulty of forecasting,management earnings forecast deviation affected investor sentiment will be more intense.This article may have the following innovations:(1)In the topic selection,there are few research literatures on the relationship between investor sentiment and management profit forecast behavior in China,and this article has some innovation and enrichment in this direction;(2)In this paper,the virtual variables are used to evaluate the accuracy of the management's earning forecast by different assignments.(3)This paper sorts and segments the market sentiment,focusing on the deviation of the management's profit forecast during the downturn.Direction,in order to judge whether the management profit forecast deviation is subjectively influenced by investor sentiment;(4)This paper adopts several sets of uncertain agent indicators summarized by the strongman,and classifies the samples according to the uncertainty.The degree of influence of investor sentiment on management's earnings forecast bias under different company uncertainties.However,due to the lack of academic level and some objective conditions,this paper still has the following shortcomings.(1)Theoretically speaking,compared with market sentiment,the relationship between investors' sentiment on specific stocks and management's predictive behavior Closer and closer to the topic of this article.However,due to the difficulty in obtaining individual sentiment data,this article uses market sentiment to replace it.(2)In the construction of indicators of investor sentiment,the principal component analysis method is adopted,and the degree of interpretation of the first principal component is only 62.689%,and there is still a considerable degree of noise.Therefore,this paper exists insufficient on the selection of emotional indicators.