Social Connections Within Executive Teams and Management Forecasts

Ke, Ruihao; Li, Meng; Ling, Zhejia; Zhang, Yuan

doi:10.1287/mnsc.2017.2925

Cited by 54 publications

(67 citation statements)

References 55 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The connections within teams, which implies the similar background and common experience, inspire a wave of research on the role of connection network [42]. Substantial evidence demonstrates that the shared experience and similar knowledge background significantly enhance communication and collaboration among team members, promote information sharing within teams, and ultimately improve the team performance [11,53].…”

Section: Related Work and Hypotheses Developmentmentioning

confidence: 99%

“…Following existent studies [19,23,27,42,46,49], we also control other factors at firm level (e.g., variables that reflect financial status of firms as well as their popularity among analysts), analyst level (e.g., variables that measure the experience and reputation of analysts), and brokerage house level (e.g., variable that reflects the size of brokerage houses), which probably have effect on analyst forecast accuracy. Additional data of control variables are obtained from CSMAR.…”

Section: Data Collectionmentioning

confidence: 99%

“…The main purpose of our analysis is to examine the role of professional connections among analyst teams. Following prior studies [22,24,42], we define two analysts as professional connected if they have worked for the same brokerage house before. We employ an indicator variable that equals to one if any two analysts within a team are connected, and zero otherwise.…”

Section: Independent Variablesmentioning

confidence: 99%

“…To control for other factors that have been documented to be related to the forecast accuracy, some control variables reflecting the heterogeneity of analysts and brokerage houses, as well as firm level characteristics are introduced into our model [14,15,19,23,27,41,42,46,49].…”

Section: Control Variablesmentioning

confidence: 99%

“…Ample evidence proves that the connection is helpful to improve the performance of teams by promoting information sharing and enhancing mutual understanding among team members in many fields [16,24]. And the effect of connections on performance could be different due to various environment [42]. Although extant studies demonstrate that social connections and school ties within teams are influential to the team behavior and performance.…”

Section: Introductionmentioning

confidence: 99%

See 4 more Smart Citations

Professional Connections within Analyst Teams and Forecast Accuracy

Wu¹,

Hong²,

Ye³

2020

Proceedings of the Annual Hawaii International Conference on System Sciences

View full text Add to dashboard Cite

Understanding factors associated with the performance of the sell-side analyst is of great value in both theory and practice. We profile the crucial influence of professional connections among security analysts on generating earnings forecast in this study based on a dataset of analysts' employment history obtained from the Securities Association of China and analysts' history forecasts obtained from CSMAR. By estimating a multivariate linear regression model, we find that professional connections within analyst teams are positively associated with earnings forecast accuracy. The results of Fisher's Permutation test further confirm that the effect of professional connections on analyst forecast quality is stronger when firms covered are facing decreasing EPS. Our results still hold for additional analyses with an alternative measure for professional connections. In conclusion, this work confirms the significant role of professional connections in information sharing and mutual understanding among analysts.

show abstract

Section: Related Work and Hypotheses Developmentmentioning

confidence: 99%

Section: Data Collectionmentioning

confidence: 99%

Section: Independent Variablesmentioning

confidence: 99%

Section: Control Variablesmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

See 3 more Smart Citations

Professional Connections within Analyst Teams and Forecast Accuracy

Wu¹,

Hong²,

Ye³

2020

Proceedings of the Annual Hawaii International Conference on System Sciences

View full text Add to dashboard Cite

show abstract

Derivative disclosures and managerial opportunism

He,

Ren

2023

Journal of Futures Markets

View full text Add to dashboard Cite

Derivatives are increasingly used by managers not only to hedge risks but also to pursue nonhedging activities for fulfilling opportunistic incentives. The Statement of Financial Accounting Standards No. 161 (SFAS 161) requires firms to disclose their objectives and strategies for using derivatives. Using the adoption of this standard, we examine whether and how derivative disclosures influence managerial opportunistic behavior. We employ insider trades and stock price crash risk to capture managerial opportunism. Applying a difference‐in‐differences research design with hand‐collected data on derivative designations, we find that, after the implementation of SFAS 161, derivative users that comply with SFAS 161 experience a significantly greater decrease in both insider trades and stock price crash risk, compared with a matched control sample of nonderivative‐users. We further provide evidence to suggest that SFAS 161 curbs managerial opportunism via reducing information asymmetry between corporate insiders and outside investors and enhancing the effectiveness of derivative hedging.

show abstract

How do insider trading incentives shape nonfinancial disclosures? Evidence from product and business expansion disclosures

2022

Rev Quant Finan Acc

View full text Add to dashboard Cite

Nonfinancial disclosures of product and business expansion planning occur frequently in practice and are an important vehicle by which managers convey corporate information to outsiders. However, little is known about how the opportunistic incentives of managers affect the choice of such nonfinancial disclosures. This study examines whether managers make their nonfinancial disclosures strategically for self-serving trading incentives. I find strong and robust evidence to suggest that managers manipulate the timing and selectivity of their nonfinancial disclosures in an attempt to maximize trading profits. Specifically, managers tend to disclose bad (good) news on products or business expansion before purchasing (selling) shares. I also find that such strategic behavior is more evident when the expected price impact of the disclosures is greater and when the CEOs are more powerful. However, I do not find evidence that the strategic behavior is weaker for firms with high institutional stock ownership. Overall, my results contribute to understanding managers’ strategic use of nonfinancial disclosures in fulfilling personal trading incentives, and should be of interest to boards of directors charged with the responsibility of monitoring and restricting opportunistic managerial disclosures and insider trades.

show abstract

Social Connections Within Executive Teams and Management Forecasts

Cited by 54 publications

References 55 publications

Professional Connections within Analyst Teams and Forecast Accuracy

Professional Connections within Analyst Teams and Forecast Accuracy

Derivative disclosures and managerial opportunism

How do insider trading incentives shape nonfinancial disclosures? Evidence from product and business expansion disclosures

Contact Info

Product

Resources

About