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Directors from Related Industries and the Issuance of Management Earnings Forecasts: The Role of Country-Level Institutions

Year: 2025

Type: article

Abstract: ABSTRACT Our study examines whether stakeholders’ information need influences the role of board directors who are concurrently serving as directors or executives in related industries (i.e., supplier or customer industries) in the issuance of management earnings forecasts. Using a comprehensive sample of firms encompassing 148 countries, we find that firms with more directors from related industries (DRIs) are more likely to issue earnings forecasts. Importantly, this positive association is more pronounced in countries with stronger protection of stakeholder rights, a less secretive culture, or higher-quality demand conditions. Overall, our results suggest that whether DRIs’ information advantage can effectively prompt management to issue earnings forecasts hinges critically on institutions that influence stakeholders’ demand for information transparency. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: G30; L14; M41.

Source: Journal of International Accounting Research

DOI: 10.2308/jiar-2022-033

Authors: Herita Akamah, Ervin L. Black, Dipankar Ghosh, Sydney Qing Shu

Institutions: University of Nebraska–Lincoln, University of Oklahoma, Miami University

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: bronze

OpenAlex ID: W4413322632