Language and management forecasts around the world*
Speakers of weak future-time reference (FTR) languages perceive the future as closer and more imminent. In this study, we examine the important question of whether the FTR properties of languages spoken by investors affect their demand for forward-looking information, thereby influencing corporate m...
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sg-ntu-dr.10356-1570472023-05-19T07:31:18Z Language and management forecasts around the world* Guan, Yuyan Wang, Zheng Wong, Franco M. H. Xin, Xiangang Nanyang Business School Business::General Management Earnings Forecasts Future-Time Reference Speakers of weak future-time reference (FTR) languages perceive the future as closer and more imminent. In this study, we examine the important question of whether the FTR properties of languages spoken by investors affect their demand for forward-looking information, thereby influencing corporate management forecast practices in different countries. We predict that investors who speak weak-FTR languages are more concerned about the future prospects of their investments and the ability of company management to respond to future changes, leading to a greater demand for management forecasts from these companies. We find that firms in weak-FTR language countries exhibit a greater propensity for and frequency of issuing management forecasts and that they also issue more long-horizon forecasts, compared to those in strong-FTR language countries. Our results hold after controlling for other country-level cultural factors. Within the same countries, firms with more foreign institutional ownership from weak-FTR countries issue more (long-horizon) management forecasts than their counterparts. Finally, firms from strong-FTR countries significantly increase their issuance of (long-horizon) management forecasts, after cross-listing their stocks in Germany, a weak-FTR country. This is the first study to examine language FTR as an antecedent to voluntary disclosures. We document a linguistic trait as a novel investor environment factor that shapes corporate voluntary disclosures and explains the cross-country variations in management forecast practices. Submitted/Accepted version We acknowledge financial support from the College of Business at the City University of Hong Kong, the Rotman School of Management at the University of Toronto, and the Social Sciences and Humanities Research Council of Canada. 2022-05-01T05:48:32Z 2022-05-01T05:48:32Z 2022 Journal Article Guan, Y., Wang, Z., Wong, F. M. H. & Xin, X. (2022). Language and management forecasts around the world*. Contemporary Accounting Research, 39(1), 50-86. https://dx.doi.org/10.1111/1911-3846.12718 0823-9150 https://hdl.handle.net/10356/157047 10.1111/1911-3846.12718 2-s2.0-85117363193 1 39 50 86 en Contemporary Accounting Research © 2022 Canadian Academic Accounting Association (CAAA). All rights reserved. This paper was published by Wiley in Contemporary Accounting Research and is made available with permission of Canadian Academic Accounting Association (CAAA). application/pdf |
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Business::General Management Earnings Forecasts Future-Time Reference Guan, Yuyan Wang, Zheng Wong, Franco M. H. Xin, Xiangang Language and management forecasts around the world* |
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Speakers of weak future-time reference (FTR) languages perceive the future as closer and more imminent. In this study, we examine the important question of whether the FTR properties of languages spoken by investors affect their demand for forward-looking information, thereby influencing corporate management forecast practices in different countries. We predict that investors who speak weak-FTR languages are more concerned about the future prospects of their investments and the ability of company management to respond to future changes, leading to a greater demand for management forecasts from these companies. We find that firms in weak-FTR language countries exhibit a greater propensity for and frequency of issuing management forecasts and that they also issue more long-horizon forecasts, compared to those in strong-FTR language countries. Our results hold after controlling for other country-level cultural factors. Within the same countries, firms with more foreign institutional ownership from weak-FTR countries issue more (long-horizon) management forecasts than their counterparts. Finally, firms from strong-FTR countries significantly increase their issuance of (long-horizon) management forecasts, after cross-listing their stocks in Germany, a weak-FTR country. This is the first study to examine language FTR as an antecedent to voluntary disclosures. We document a linguistic trait as a novel investor environment factor that shapes corporate voluntary disclosures and explains the cross-country variations in management forecast practices. |
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Nanyang Business School |
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Nanyang Business School Guan, Yuyan Wang, Zheng Wong, Franco M. H. Xin, Xiangang |
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Article |
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Guan, Yuyan Wang, Zheng Wong, Franco M. H. Xin, Xiangang |
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Guan, Yuyan |
title |
Language and management forecasts around the world* |
title_short |
Language and management forecasts around the world* |
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Language and management forecasts around the world* |
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Language and management forecasts around the world* |
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Language and management forecasts around the world* |
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language and management forecasts around the world* |
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2022 |
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https://hdl.handle.net/10356/157047 |
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