RESEARCH BRIEFS 2022 College of Business Research Excellence Award Recipients — Presented at the Tenorio Research Lecture Event This year’s research excellence award recipients explore topics relating to financial literacy, how mindset impacts risk assessment, social responsibility in the marketplace and stock performance.
DR. LEON CHEN, Professor of Finance and DR. FERDINAND SIAGIAN, Associate Professor of Accounting Analysts’ Target Price, Stock Performance and Real Earnings Management We examine whether firm-level real earnings management (REM) activities have impact on future stock analysts’ target prices and future stock performance. Using the data of 1,775 U.S. firms during the period of 1999-2020, we find evidence that firms with higher REM activities in the previous fiscal year are associated with higher target-price implied 12-month ahead stock returns and higher dispersion of analysts’ estimates in the current year. Our results suggest that REM activities increase both analysts’ optimism and information asymmetry. We also document that firms with higher REM activities are associated with higher future 12-month stock returns, as well as higher future stock returns in excess of the target-price implied returns.
38 / C OLLEGE OF BUSIN ES S I N R E V I E W
