Language and Management Forecasts around the World

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)50-86
Number of pages37
Journal / PublicationContemporary Accounting Research
Issue number1
Online published19 Jul 2021
Publication statusPublished - 2022


Speakers of weak future-time reference (FTR) languages perceive the future as closer and more imminent. In this study, we examine the important question whether the FTR properties of languages spoken by investors affects their demand for forward-looking information, thereby influencing corporate management forecast practices in different countries. We predict that investors who speak weak-FTR languages are more concerned about the future prospects of their investments and the ability of company management to respond to future changes, leading to a greater demand for management forecasts from these companies. We find that firms in weak-FTR language countries exhibit a greater propensity and frequency of issuing management forecasts and that they also issue more long-horizon forecasts, compared to those in strong-FTR language countries. Our results hold after controlling for other country-level cultural factors. Within the same countries, firms with more foreign institutional ownership from weak-FTR countries issue more (long-horizon) management forecasts than their counterparts. Finally, firms from strong-FTR countries significantly increase their issuance of (long-horizon) management forecasts, after cross-listing their stocks in Germany, a weak-FTR country. This is the first study to examine language FTR as an antecedent to voluntary disclosures. We document a linguistic trait as a novel investor environment factor that shapes corporate voluntary disclosures and explains the cross-country variations in management forecast practices.

Research Area(s)

  • Language, Linguistic relativity principle, Future-time reference, Management earnings forecasts, Foreign institutional ownership, Cross-listing

Bibliographic Note

Research Unit(s) information for this publication is provided by the author(s) concerned.

Citation Format(s)

Language and Management Forecasts around the World. / GUAN, Yuyan; WANG, Zheng; WONG, M. H. Franco et al.
In: Contemporary Accounting Research, Vol. 39, No. 1, 2022, p. 50-86.

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