Management Forecasts around the World

We examine the practice of disclosing forward-looking information by management around the world using a comprehensive data set containing detailed attributes of management forecasts from 65 countries. We find that the incidence of management forecasts is positively associated with the protection of private businesses, but it is negatively associated with the strength of institutions related to investor protection. In addition, we find evidence, albeit somewhat weak, that political economy (i.e., involvement of the state in the economy) is negatively associated with management's tendency to issue forecasts and the strength of the mandatory reporting system is positively associated with the occurrence of management forecasts. Further analysis reveals that management forecasts are informative to the stock market in nearly all countries. Business protection, investor protection, and the strength of the mandatory reporting system are positively associated with the level of informativeness, but the involvement of the state in the economy is negatively associated with the informativeness. Additional analysis indicates that various properties of management forecasts such as forecast frequency, quantitative specificity of forecasts, forecast horizon, attribution of forecasts, and forecast news are also systematically related to the four types of country-level institutional characteristics.