Do Smart Employees Matter for Management Forecasts?
Student thesis: Doctoral Thesis
Related Research Unit(s)
This study examines the association between employee cognitive skills and the issuance of management forecasts. Using information from online postings of professional jobs, I measure employers’ requirements for cognitive skills from their employees and find that cognitive skill requirements are positively associated with both the likelihood and frequency of management forecast issuance. This association is more pronounced for firms operating in a more complex and uncertain business environment, and holds for specific types of management forecasts, including earnings, sales, and capital expenditure forecasts. In addition, conditional on a firm’s decision to issue forecasts, I find that employee cognitive skills are positively associated with management forecast accuracy and timeliness. These results indicate that as an important input in firms’ internal information environment, employee cognitive skills contribute to management forecast practices.
- Cognitive skill, Management forecasts, Internal information environment, Employees, Labor market