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The power of crowds: can minority shareholder activism promote management earnings forecast accuracy

The power of crowds: can minority shareholder activism promote management earnings forecast accuracy Novel online activism of minority shareholders could be a new governance mechanism but has received little academic attention. This study examines the impact of such minority shareholder activism on management earnings forecast accuracy. Based on a sample of publicly listed firms in the Chinese Shenzhen Stock Exchange between 2010 and 2018, we find that online activism promotes earnings forecast accuracy. The effect is stronger with more negative media coverage and higher manager response quality. Overall, our results indicate that minority shareholders in China could play a monitoring role when they are empowered with voice in the information age. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting & Finance Wiley

The power of crowds: can minority shareholder activism promote management earnings forecast accuracy

Accounting & Finance , Volume Early View – Oct 2, 2021

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Publisher
Wiley
Copyright
Accounting and Finance © 2021 Accounting and Finance Association of Australia and New Zealand
ISSN
0810-5391
eISSN
1467-629X
DOI
10.1111/acfi.12864
Publisher site
See Article on Publisher Site

Abstract

Novel online activism of minority shareholders could be a new governance mechanism but has received little academic attention. This study examines the impact of such minority shareholder activism on management earnings forecast accuracy. Based on a sample of publicly listed firms in the Chinese Shenzhen Stock Exchange between 2010 and 2018, we find that online activism promotes earnings forecast accuracy. The effect is stronger with more negative media coverage and higher manager response quality. Overall, our results indicate that minority shareholders in China could play a monitoring role when they are empowered with voice in the information age.

Journal

Accounting & FinanceWiley

Published: Oct 2, 2021

Keywords: Management earnings forecast; Minority shareholder activism; Online interactive platform

References