Research Summary
Research Summary
Description
Dawn Matsumoto's research investigates managers' financial reporting decisions including the incentives driving these decisions and the impact of these decisions on capital market participants. She is interested in the role of financial intermediaries (such as financial analysts and institutional investors) on the capital markets and the interplay between these market participants and the managers of the firm. For example, in one study, she explores recent allegations in the financial press that managers 'guide' analysts to produce forecasts that they can either meet or exceed at the earnings announcement. The study indicates that the tendency to guide analysts' forecasts downward has increased in recent years and is more prevalent among firms with higher institutional ownership, higher growth prospects, and higher litigation risk. Another study (with Professor Robert Bowen and Ph.D. student Angela Davis) investigates the effects of conference calls on analysts' ability to forecast future earnings. The results of this study suggest that conference calls provide material information to analysts and that these calls serve to 'level the playing field' across analysts by providing information simultaneously to a large group of users.