How The Inflation Affects Management Performance Forecasts

Management performance forecast is an important source of performance information.Because it provides investors with relevant information about the company's future performance,reduces the degree of market information asymmetry,and thus affects both investor's pricing judgment on the company's stock price and investors' investment trading behavior.So it is indispensable to capital market participants.On the other hand,inflation volatility is a prominent feature of the modern economy,but the �invisibility� of the impact of inflation on micro-enterprises has only received more attention from scholars in recent years.The management of listed companies usually make decisions based on their own understanding of inflation,but their understanding of inflation may not be complete because of this �invisibility�.Therefore,the incomplete understanding of inflation will be reflected in the final business results and related information disclosure.In summary,it is of great theoretical and practical significance to deeply understand the impact of inflation's �invisibility� on management performance forecast and management behavior.This article starts from the macroeconomic factor inflation,indicating that the impact of inflation on micro-enterprises is �invisible�,and the management of listed companies �can't see clearly� the impact of inflation on business results.The management will reflect this when it discloses the performance forecast.Through combing the relevant literatures at home and abroad,this paper takes the quarterly data of Shanghai and Shenzhen A-share listed companies in 2005-2017 as a sample,establishes multiple regression models and conducts empirical tests.The results of the study are as follows:(1)Under the same conditions,the probability of the management forecast decreases as the inflation rate rises;(2)If the management chooses to disclose the performance forecast,the preision and accuracy of the management forecasts are reduced,too;(3)Further,this paper finds that when the listed company is a state-owned enterprise or the asset-liability ratio is high,the precison and accuracy of the management forecast will be further reduced,but if the listed company disclose the forecast information voluntarily,this decline in precision and accuracy can be mitigated.