Voluntary Disclosure, Analyst Following, Forecast Accuracy and Dispersion = Evidence From Korea

다국어 초록 (Multilingual Abstract)

In this paper, we examined how the frequency of voluntary disclosure is associated with the number of analyst following and the analysts' earnings forecast characteristics. We find that analysts are more attracted to the firms that provide greater level of voluntary disclosure. We also find that negative association between the frequency of voluntary disclosure and analysts' forecasts error indicates that more frequent voluntary disclosures lowers analysts' forecast error by reducing the uncertainty in analysts' earnings forecast. Finally we find that the increased level of voluntary disclosure reduces dispersion of forecasted earnings. Our findings suggest that voluntary disclosure plays a role in reducing information asymmetry between firm and analysts as well as among analysts.