Les Cahiers de Recherche - HEC Paris
Levels of voluntary disclosure in IPO prospectuses : an empirical analysis
() and Anne Cazavan-Jeny
Abstract: This paper focuses on how forecasts information is
disclosed in IPO prospectuses. In France, managers report either detailed
forecasts or only a brief summary. We investigate the determinants and
consequences of the varying levels of detail provided in these forecasts.
Based on a sample of 82 IPOs on the Euronext Paris market (2000-2002), we
show that only two variables are associated with highly detailed forecast
disclosures: forecast horizon and firm age. We also find that the forecast
error decreases as the level of detail in the forecast disclosures
increases. This finding is robust to our reverse causality test (Heckman
two-stage self-selection procedure) and suggests that the level of detail
in forecast disclosures enhances the reliability of earnings forecasts.
Keywords: IPO; forecast disclosure; forecast error; (follow links to similar papers)
JEL-Codes: G14; G34; M41; (follow links to similar papers)
36 pages, December 21, 2005
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