A Research On The Relationship Between Geografic Peer Effects And Management Earnings Forecasts Disclosure

With the maturity of Chinas' capital market,investors' demand for information is also increasing.As an important signal guiding investment behavior in the securities market,earnings forecasts can help creditors,investors and other information users more accurately evaluate and analyze the future benefits of enterprises.Also,it is an important basis for all parties in the securities market to make reasonable economic decisions.For a long time,earnings forecasts has been widely concerned by scholars,executives of listed enterprises and investors.On March 15,2001,China Securities Regulatory Commission issued No.1 Standards for the Content and Format of Enterprises Information Disclosure of Public Securities-Issuance Prospectus,which represents that enterprises' earnings forecasts in our country have entered the stage of voluntary disclosure.But compared with mandatory disclosure stage,the executives become relatively more reluctant to provide earnings forecasts,which consequently does harm to the information users.On the basis of studying some relevant foreign and domestic researches,this dissertation chooses 2147 A-share listed enterprises as the sample,our panel data set for our regressions covers the years 2013 to 2017.In this dissertation,we attempt to fill this gap by examining whether a firm's choice to provide an earnings forecast is sensitive to the forecast decisions of enterprises in the same geographic area,that is,whether there is certain geographic peer effects in the disclosure of earnings forecasts.In this dissertation,the division of geographical regions is based on provinces(Municipalities,autonomous regions).We set an explained variable indicating whether a firm provides at least one earnings forecast in a fiscal year and an explanatory variable capturing the fraction of firms in the same area but in a different industry that provided earnings forecasts in the prior year.In addition to controlling for industry peer effects,we also control for a number of firm-level factors,year fixed effects,geographic fixed effects.This dissertation finds:(1)The likelihood that an enterprise voluntarily provides an earnings forecast is sensitive to the extent to which other enterprises in the same geographic area provide earnings forecasts;(2)There are significant industry peer effects in providing earnings forecasts,and the geographic peer effects in providing earnings forecasts will be more significant,when enterprises are in a more fiercely competitive industry;(3)If the the concentration of enterprises in the region is higher,the geographic peer effects in providing earnings forecasts will be more significant;(4)If the ownership structure of enterprises are relatively decentralized,the geographic peer effects in providing earnings forecasts will be more significant;(5)Compared with state-owned enterprises,the geographic peer effects in non-state-owned firms' earnings forecasts are more significant.Finally,we first conduct a robustness test.Given the importance of classifying firms as non-industry local peers and industry peers,we show that our results are not sensitive to the choice of industry definition.Then we conducted two-stage least squares instrumental variable regressions,and the results further confirmed the reliability of the previous regression results.According to the above conclusions,this dissertation holds that:executives of listed enterprises should deepen the understanding and identification of peer effects,and formulate a more scientific enterprise information disclosure system;At the same time,the regulatory authorities should consider the spillover effects of geographic peer effects,making full use of it.They need optimize management methods,improve China's information disclosure system,so as to promote the healthy development of the capital market.