The Research Between Background Characteristics Of Managers And Attributes Of Forecast Earnings Of Listed Companies

With the gradual development of China’s securities market, the problems caused by asymmetric information have become increasingly prominent, the needs and requirements of investors to information of listed companies is also increasing; at same time, due to the presence of "adverse selection," in order to reduce company’s cost of capital, managers will disclose a variety of internal information about their financial position and the true value of the company, thus allow investors properly evaluate the company and make the correct investment. The disclosure of information is an important means to effectively reduce the information asymmetry and to let investors to understand the results of operations and financial condition of listed companies. Managers earnings forecast information is one of important financial information, which is different from the traditional financial information that is reaction of the historical accounting information, and passes future earnings of listed companies, and enhances the decision usefulness of the information, and received wide attention in the securities market. But fewer existed earnings forecast research articles, and studies have mainly focused on the disclosure of earnings forecast behavior motivation, behavior, little research concern earnings forecasts attributes (as forecast frequency, forecast accuracy, prediction-oriented as well as forecast deviation),which is a important issue, and reduce the validity of earnings forecasts as an investor decision-making base. In addition, a number of scholars are mainly from the level of company itself to. research earnings forecasts, few scholars consider personal characteristics factors of managers, overlooked the information disclosed actors-listed company managers, and his/her the background different characteristics may lead to different earnings forecast,which can be said that is a blank field.Especially in the special performance forecast system of our country, due to the simultaneous presence of mandatory performance forecast and non-mandatory performance forecast, some of the company which should disclose doesn’t disclose, and some non-mandatory company voluntarily disclose of earnings forecast information, the company have flexibility in information disclosure of earnings forecast and have different disclosure characteristics. Managers will choose what to disclose for the content and accuracy of earnings forecasts and properly adjust accuracy and precision of earnings forecast. Thus how to study the attributes of earnings forecasts of China’s listed companies from a more micro level of individual managers and decision-makers levels, and understand the specific managers disclosures style, is significant to investors make more objective and accurate decision as well as to improve the allocative efficiency of capital markets.Therefore, this article attempts to combine two research methods of theory and practice, and to know the status and limitations by reading literature scholars on managers background characteristics and attributes of earnings forecasts; based on the principal-agent theory, asymmetric information theory, signaling theory, high-level management theory, by logical deduction, inductive reasoning, and other methods, deeply analyze the mechanism and the conduction path of managers background characteristics to the attributes of listed company earnings forecasts, so as to lay a solid theoretical foundation and prerequisite for empirical research of this paper. Then the paper elaborated the evolution and feature of performance forecast system of China. Followed,the paper provide hypothesis mainly from manager’s age, gender, education, educational background and work experience, and use descriptive statistics, correlation analysis, multivariate ordinal variable model (Ordered Logit Model) having empirical test of influence of managers’ demographic background characteristic to the attributes of listed company earnings forecasts (forecast frequency, forecast accuracy, forecast-oriented as well as forecast deviation). Finally, the paper gives some politic advice.The study results show that:there exist a certain correlation between the background characteristics of managers and the attributes of listed company’s earnings forecasts. Specifically,(1) managers’ gender mainly influenced the accuracy and bias of earnings forecast, comparing to male managers, female managers have higher accuracy and lower deviation of forecast.(2) the impact of managers age characteristics is most significantly, which is significantly correlated with frequency, accuracy and forecast-oriented of earnings forecast, managers’ age is significantly negatively correlated with frequencies and orientation, the older of managers, the more conservative, and unwilling to forecast earnings, the more likely having downward forecast guidance; and significant positive correlation with the accuracy of earnings forecasts, the older managers tend to choose a more precise point estimate to disclose information.(3) Professional background of financial accounting education of managers has a certain impact on the frequency of earnings forecast, but the impact is not significant; however, due to the professionalism and the sensitivity of the data, managers with financial accounting education have lower bias of earnings forecast.(4) The deviation of earnings forecast is also smaller for managers had the financial and accounting work experience.(5) The degree of the managers did not have significant affection on the attributes of earnings forecast.The innovation and research contributions of this paper are mainly as follow:First, this article innovatively from the angle of information disclosure actors——background characteristics of listed company managers, have a comprehensive and system research on the relationship between the personal characteristics of managers and attributes of listed company earnings forecasts, not also fill the blank of the research between the characteristics of information discloser and the attributes of information disclosure, but also expand the perspective and depth of existed research on background characteristics of listed companies managers, information disclosure theory, and provide a new ideas and direction worth exploring for follow-up study.Second, the empirical research found that heterogeneity of managers’ background indeed have an impact on the attributes of listed company’s earnings forecast, and lead to different earnings forecast style, which can explain the reasons of the difference of listed company information disclosure in China’s securities to some extent, and reveal the personal characteristics factors of the attributes of listed companies’earnings forecast, and is benefit for improving the performance forecast system for China’s regulatory authorities.Third, the study of the relationship between background characteristics of manager and the attributes of listed company earnings forecasts, is benefit for helping investors identify the information disclosure style of managers writh different characteristics, then investors can more objectively and scientifically evaluate the information of corresponding managers choose to disclose, and have a favor to lower degree of information asymmetry between investors and company managers, and improve the accuracy of investors’ decision, thereby increase the efficiency of investment in China’s securities market and allocative efficiency of capital markets.