Digital Technology Innovation, Surplus Management and Analyst Forecast Bias

Abstract

With the rapid development of digital economy, digital technology, as its technical support, has an important impact on market information environment and analysts' forecast deviation. Using the data of listed companies from 2007 to 2021, this paper investigates the impact of corporate digital technology innovation on analyst forecast bias. We find that enterprise digital technology innovation has a restraining effect on analyst forecast bias, and this conclusion is still valid after a series of robustness tests. Heterogeneity analysis shows that this effect is more obvious in firms with low media attention, investor attention and institutional ownership. Mechanism analysis shows that digital technology innovation inhibits firms' earnings management behavior, thus reducing analyst forecast bias. These results are consistent with the logic that digital technology innovation enables managers to use visual earnings management to suppress earnings manipulation and reduce analyst forecast bias. The conclusion of this paper expands the research scope of the economic effect of technological innovation in the digital era, and has certain significance for enterprises to optimize digital innovation strategy and improve market transparency.