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- Title
Managerial short‐termism and financial statement comparability.
- Authors
Zhang, Zhichao; Wang, Fangjun
- Abstract
This study examines the association between managerial short‐termism and financial statement comparability. Using a short‐termism measure constructed through textual analysis and machine learning based on a Chinese language setting in management discussion and analysis (MD&A), we find that firms with higher short‐termism produce financial statements with lower comparability and that this effect disappears in short‐horizon industries. We further find that the increased comparability is associated with an improvement in analysts' forecasts only in non‐short‐horizon industries. Overall, our findings suggest that firms with greater managerial short‐termism are more likely to have unusual corporate behaviours, thus having worse comparability with other firms.
- Subjects
CONTENT analysis; FINANCIAL statements; CHINESE language; MACHINE learning; EARNINGS forecasting
- Publication
Accounting & Finance, 2023, Vol 63, Issue 5, p5027
- ISSN
0810-5391
- Publication type
Article
- DOI
10.1111/acfi.13138