Product advertising and financial analyst forecasts

IF 3.3 3区管理学 Q1 BUSINESS, FINANCE

Journal of Accounting and Public Policy Pub Date : 2025-03-20 DOI:10.1016/j.jaccpubpol.2025.107306

Heeick Choi , SeungWon Lee , Inho Suk , Hao Zhang

引用次数: 0

Abstract

We examine whether product advertising provides value-relevant information that enables financial analysts to make better earnings and sales forecasts. Our analysis reveals that a firm’s product advertising intensity is positively related to the informativeness and accuracy of analyst forecasts. A difference-in-differences test and an instrumental variable analysis identify the causal relationship. Additionally, the effect of advertising on analyst forecast quality is stronger when a firm has greater coverage from industry-expert analysts, exhibits more volatile operating performance, and holds newly registered trademarks. Overall, our evidence suggests that product advertising conveys valuable information that analysts can utilize to produce higher-quality forecasts for investors, highlighting the role of advertising in a firm’s overall information environment.

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来源期刊

Journal of Accounting and Public Policy Multiple-

CiteScore

4.80

自引率

2.80%

发文量

期刊介绍： The Journal of Accounting and Public Policy publishes research papers focusing on the intersection between accounting and public policy. Preference is given to papers illuminating through theoretical or empirical analysis, the effects of accounting on public policy and vice-versa. Subjects treated in this journal include the interface of accounting with economics, political science, sociology, or law. The Journal includes a section entitled Accounting Letters. This section publishes short research articles that should not exceed approximately 3,000 words. The objective of this section is to facilitate the rapid dissemination of important accounting research. Accordingly, articles submitted to this section will be reviewed within fours weeks of receipt, revisions will be limited to one, and publication will occur within four months of acceptance.