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An Examination of the Differential Impact of Regulation FD on Analysts' Forecast Accuracy
Article first published online: 10 JAN 2006
DOI: 10.1111/j.1540-6288.2006.00130.x
Additional Information
How to Cite
Findlay, S. and Mathew, P. G. (2006), An Examination of the Differential Impact of Regulation FD on Analysts' Forecast Accuracy. Financial Review, 41: 9–31. doi: 10.1111/j.1540-6288.2006.00130.x
Publication History
- Issue published online: 10 JAN 2006
- Article first published online: 10 JAN 2006
- Abstract
- References
- Cited By
Keywords:
- disclosure;
- fair disclosure;
- earnings forecast accuracy;
- Regulation FD;
- Reg FD;
- Regulation Fair Disclosure;
- Fair Disclosure rules;
- analysts;
- brokerage analysts;
- security analysts;
- analyst forecasts;
- corporate guidance;
- pre-announcement guidance
- G14;
- G18;
- G24;
- G38
Abstract
Regulation fair disclosure (FD) requires companies to publicly disseminate information, effectively preventing the selective pre-earnings announcement guidance to analysts common in the past. We investigate the effects of Regulation FD's reducing information disparity across analysts on their forecast accuracy. Proxies for private information, including brokerage size and analyst company-specific experience, lose their explanatory power for analysts' relative accuracy after Regulation FD. Analyst forecast accuracy declines overall, but analysts that are relatively less accurate (more accurate) before Regulation FD improve (deteriorate) after implementation. Our findings are consistent with selective guidance partially explaining variation in the forecasting accuracy of analysts before Regulation FD.