Abstract
I analyze the accuracy of firms’ forecasts of their own future sales (and workforce numbers), which German companies provided secretly to the IAB Establishment Panel. Previous empirical evidence, using forecasts from public disclosures, revealed that managers’ earnings or sales forecasts on average show a bias towards overoptimism. However, in the present study the average firm is found to be very well able to correctly forecast its own future key figures. I suggest that public disclosed forecasts are on average overoptimistic because they serve as a signal to investors, while the ones in this dataset do not. Although I also find a large fraction of firms to be persistently overoptimistic over time, the share of steadily overpessimistic firms is even slightly larger.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
