Improvement in clinical trial disclosures and analysts’ forecast accuracy: evidence from the pharmaceutical industry

Hao, Maggie; Forgione, Dana A.; Guo, Liang; Zhang, Hongxian

doi:10.1007/s11156-016-0608-7

Cited by 6 publications

(2 citation statements)

References 42 publications

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“…7 If there are multiple analysts making the EPS forecasts for a firm, we employ the average of their last available forecasts for annual EPS. In line with prior research on analyst forecast errors (Lang and Lundholm 1996;Das et al 1998;Lim 2001;Hong and Kubik 2003;Ke and Yu 2006;Dhaliwal et al 2012;Hao et al 2017;Bhandari et al 2018), we control for firm size (size), return volatility (retvol), stock price (price), abnormal stock returns (qtrret), pre-tax return on assets (roa), financial constraints (hp), institutional ownership (insti), intangible assets (intangible), book-to-market ratio (btm), analyst forecast horizon (horizon), abnormal trading volume (abtradvol), change in pre-tax return on assets (changeroa), and change in EPS (changeeps). These variables are defined in the Appendix.…”

Section: The Effect Of Corporate Tax Avoidance On Analyst Forecast Ersupporting

confidence: 85%

The impact of corporate tax avoidance on analyst coverage and forecasts

Ren

Taffler

2019

Rev Quant Finan Acc

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Corporate tax avoidance is likely to be associated with a high level of earnings management and with high financial opacity in the time-series. On this basis, we hypothesize that analyst coverage is negatively associated with corporate tax avoidance. Our results confirm this conjecture, and are robust to using a firm-fixed-effects model and a quasi-natural experiment to control for potential endogeneity. Additional analysis shows that analyst coverage is negatively related to tax risk, but there is no evidence that the informativeness of, or errors in, analyst forecasts are associated with tax avoidance. Overall, our study advances understanding of the implications of corporate tax avoidance for analyst behavior.

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Section: The Effect Of Corporate Tax Avoidance On Analyst Forecast Ersupporting

confidence: 85%

The impact of corporate tax avoidance on analyst coverage and forecasts

Ren

Taffler

2019

Rev Quant Finan Acc

View full text Add to dashboard Cite

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“…11 This result shows that the FDAAA might have unintended consequences of the FDAAA and ought to draw attention from policy makers. A few recent studies examine the consequences of additional disclosure from the FDAAA but focus on an individual firm's information environment, such as reduced information asymmetry (Bourveau et al, 2017) and increased forecast accuracy (Hao et al, 2017). However, none of them examines the consequences on aggregate innovative activities following increased information transparency and social welfare implications.…”

Section: Data Sourcesmentioning

confidence: 99%

Enhanced Information Disclosure and Drug Development: Evidence from Mandatory Reporting of Clinical Trials

Oh¹,

Moon²,

Lee³

2020

Preprint

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Using Section 801 of the Food and Drug Administration Amendments Act of 2007 (FDAAA) that requires drug developers to disclose clinical trial plans and detailed study results publicly, we provide novel evidence for the effect of information disclosure on drug development. We find suspensions increase significantly in industry-sponsored clinical trials after the FDAAA. This effect has a causal interpretation based on a difference-indifferences analysis that exploits the disclosure requirement imposed by the International Committee of Medical Journal Editors (ICMJE) before the FDAAA. Further evidence supports peer learning as a mechanism for the increased suspensions after the FDAAA. Finally, we analyze the social welfare implications of enhanced information disclosure; while the FDAAA helps improve drug quality, it leads to more suspensions of potential new drugs that could have reduced mortality and morbidity.

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