Ahmed Bouteska , Taimur Sharif , Mohammad Zoynul Abedin
{"title":"Nexus between the anchoring effect and management earnings forecasts: An investigation of the listed firms in the US stock market","authors":"Ahmed Bouteska , Taimur Sharif , Mohammad Zoynul Abedin","doi":"10.1016/j.jcae.2025.100472","DOIUrl":null,"url":null,"abstract":"<div><div>This paper investigates the influence of the anchoring effects on management earnings forecasting (MF) process among the US firms using the voluntary disclosures of MFs during the period 2015–2022. The results show evidence that the MFs’ valuation of the present period is influenced by the internal and external anchoring effects, reflected by firms’ previous earnings forecasts and the earnings forecasts from their industry counterparts, respectively. Furthermore, we highlight that stronger anchoring effects deteriorate the accuracy of the MF and improve the market reaction to the issued forecasts. Given these findings, we suggest that the informational content of the anchor heuristic in MF is affected in the stock prices. Overall, our study complement the behavioral finance literature and warn users about misleading or unreliable information for anchor heuristic in MF when it comes to make investment decisions.</div><div>The outcomes of this paper provide useful insights for practitioners, policymakers and to the regulatory authorities.</div></div>","PeriodicalId":46693,"journal":{"name":"Journal of Contemporary Accounting & Economics","volume":"21 2","pages":"Article 100472"},"PeriodicalIF":2.9000,"publicationDate":"2025-04-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Contemporary Accounting & Economics","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1815566925000190","RegionNum":3,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
This paper investigates the influence of the anchoring effects on management earnings forecasting (MF) process among the US firms using the voluntary disclosures of MFs during the period 2015–2022. The results show evidence that the MFs’ valuation of the present period is influenced by the internal and external anchoring effects, reflected by firms’ previous earnings forecasts and the earnings forecasts from their industry counterparts, respectively. Furthermore, we highlight that stronger anchoring effects deteriorate the accuracy of the MF and improve the market reaction to the issued forecasts. Given these findings, we suggest that the informational content of the anchor heuristic in MF is affected in the stock prices. Overall, our study complement the behavioral finance literature and warn users about misleading or unreliable information for anchor heuristic in MF when it comes to make investment decisions.
The outcomes of this paper provide useful insights for practitioners, policymakers and to the regulatory authorities.