Regulatory fragmentation and management earnings forecasts
Abstract
Purpose
This study examines the impact of regulatory fragmentation on the issuance and width of management earnings forecasts (MEFs) in US firms, exploring how the presence of multiple regulatory bodies influences corporate disclosure and transparency.
Design/methodology/approach
Using data from the Federal Register from 2004 to 2019, the study employs a measure of regulatory fragmentation to analyze its effect on the likelihood and width of MEFs.
Findings
The research finds that heightened regulatory fragmentation is associated with an increased likelihood of firms issuing MEFs and a wider range of forecasted earnings, indicating a strategic use of MEFs to manage regulatory complexity.
Originality/value
The study offers a unique perspective by contrasting with literature that predominantly views regulatory fragmentation negatively, providing detailed insights into its complex effects on corporate communication. It suggests the strategic use of MEFs amid regulatory challenges, enhancing our understanding of how regulatory environments shape corporate communication strategies.
Keywords
Acknowledgements
I would like to express my heartfelt gratitude to the editor, Tom Smith, and the specialist editor, Jie Zhou, for their invaluable guidance and constructive feedback throughout the review process. I also extend my sincere thanks to the two anonymous reviewers for their thoughtful comments and suggestions, which greatly enhance the quality of this paper.
Citation
Xu, H. (2024), "Regulatory fragmentation and management earnings forecasts", Journal of Accounting Literature, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/JAL-02-2024-0031
Publisher
:Emerald Publishing Limited
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