“…Chen, Matsumoto, and Rajgopal (2011) and Houston, Lev, and Tucker (2010) find that when firms cease earnings guidance, analyst earnings forecast accuracy declines and forecast dispersion increases, impairing the quality of information available to investors. 3 More recently, Call, Chen, Miao, and Tong (2014) find that firms issuing short-term quarterly guidance actually exhibit less, not more earnings management, and Chen, Huang, and Lao (2014) find that guidance firms report more future innovations than non-guidance firms, and that quarterly guidance has a positive incremental impact on future innovation over annual guidance. We extend this literature by evaluating the potential impact of one of the highly touted alternatives to short-term guidance, and find that long-term guidance has no discernable effect on earnings management activity or on investment decisions.…”