Differential effects of regulation FD on short- and long-term analyst forecasts

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

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Original languageEnglish
Pages (from-to)401-418
Journal / PublicationJournal of Accounting and Public Policy
Issue number5
Publication statusPublished - Sep 2009


In this paper, we provide evidence that the quality of short-term analyst forecasts improved but the quality of long-term analyst forecasts deteriorated after the implementation of Regulation Fair Disclosure (FD). More specifically, our results show that the precision of the idiosyncratic information component of short-term forecasts improved in the post-FD period, whereas the precision of both the common and idiosyncratic information components of long-term forecasts declined. We attribute this result to the reduced disclosure of long-term, future-oriented information in the post-FD period. Thus our results support assertions by some analysts that FD has had a chilling effect on information that is relevant to long-term forecasts. © 2009 Elsevier Inc. All rights reserved.

Research Area(s)

  • Analyst forecast, Idiosyncratic and common information components, Long-term and short-term forecasts, Regulation FD