경영자 예측정보의 신뢰성에 대한 외국인투자자 및 국내 기관투자가의 견제기능

Managers have incentives to voluntarily disclose their inside information to reduce information asymmetry between themselves and investors. However, in the absence of the adequate monitoring mechanism, managers will tend to disclose good news only. In the countries where the system to protect investors is well established, class action lawsuits play an important role to monitor managers and induce credible managerial disclosures. An alternative to class action lawsuits is foreign and institutional investors. These professional investors are able to monitor managers by submitting a sell order for the large quantity of securities. This study examines whether such professional investors play the monitoring of management to ensure credible earnings forecasts disclosures. The results reveal that management earnings forecasts are in general overestimated relative to actually realized earnings. However, management earnings forecasts issued by firms with high foreign and institutional ownership are not significantly different from zero, suggesting that management earnings forecasts for these firms are unbiased. Furthermore, these results hold even after controlling for other factors affecting bias of the forecasts. Also, the results show that the accuracy of management earnings forecasts is positively related to foreign ownership. These results are consistent with the argument that foreign and institutional investors serve the monitoring mechanism for management voluntary disclosures.