ABSTRACT In this study, we examine whether more frequent voluntary disclosures are associated with greater pre‐disclosure forecasting activity by analysts in the retail industry. We observe a positive association between the disclosure of monthly comparable store sales (MCSS) and the number of analysts’ quarterly sales forecasts preceding managers’ public MCSS disclosure. Moreover, we find that an increase in analysts’ pre‐disclosure forecasts correlates with heightened abnormal investor activity, including stock return volatility and trading volume, preceding the public announcement of MCSS. In addition, the magnitude of market reactions to pre‐disclosure forecasts is similar to that of reactions to post‐disclosure forecasts. The evidence suggests that when retail firms provide more frequent and timely comparable store sales (CSS) information, analysts demonstrate greater interest and research activity in providing pre‐disclosure quarterly sales forecasts. CSS is a voluntary disclosure of a key performance indicator (KPI), and the findings may be important to regulators who are considering the importance and frequency of future KPI reporting.
ABSTRACT This paper examines how firm‐level exposure to tax policy uncertainty affects corporate tax avoidance. Using US public firms from 2002 to 2020, we measure exposure with the tax policy risk (TPR) index of Hassan et al., which captures the share of quarterly earnings‐call discussion devoted to risks surrounding tax policy. Firms with greater exposure to tax policy uncertainty exhibit lower effective tax rates: a one‐standard‐deviation increase in TPR raises tax avoidance by 2%–3% relative to the sample mean, and the relationship survives instrumental‐variable estimation, propensity score matching, and lead‐lag tests. Consistent with real options reasoning, in which uncertainty about domestic tax policy raises the value of relocating income to less exposed jurisdictions, high‐TPR firms shift more income abroad and operate more tax‐haven subsidiaries. The response is concentrated among financially flexible firms, firms with earnings‐management expertise, and firms with market power, and shareholders value tax avoidance more highly when tax policy uncertainty is high. Our findings identify tax policy uncertainty as a distinct driver of corporate tax strategies.
ABSTRACT This study examines whether stakeholder orientation, which allows directors to consider the interests of stakeholders beyond shareholders, affects investors’ responses to earnings announcements, as measured by earnings response coefficients (ERCs). We hypothesize that stakeholder orientation increases ERCs by mitigating managerial opportunism and excessive risk‐taking. Exploiting the staggered adoption of constituency statutes across U.S. states as a natural experiment, we find that stakeholder orientation increases ERCs through these channels. We further show that investors in stakeholder‐oriented firms respond more strongly to earnings news even when underlying earnings quality is held constant, suggesting that such earnings are perceived as more credible. The effect is stronger in settings with greater stakeholder conflicts, weaker monitoring, and higher consumer orientation. Overall, our findings provide evidence that stakeholder orientation enhances investor responsiveness to earnings reports by improving both the credibility and informativeness of reported earnings.
ABSTRACT This paper critically assesses the current state of the literature and sets an agenda for future research on Corporate Reporting Transparency Quality (CRTQ) in formal corporate reporting. Employing a systematic literature review approach that follows the Preferred Reporting Items for Systematic Reviews and Meta‐Analyses (PRISMA) model and analysing a total of 70 papers, 65 from top‐ranked journals and five from peer‐reviewed journals published between May 2002 and May 2025, the analysis reveals the absence of a clear and universally accepted definition of CRTQ. This highlights the need to broaden the conceptual scope to encompass financial, governance, operational, social, environmental and risk dimensions. The findings further emphasise the importance of adopting multiple theoretical perspectives to capture the multifaceted nature of CRTQ. Existing studies predominantly rely on disclosure indices that measure the quantity over its quality of information, exposing a critical gap in the literature and demonstrating the need for a multidimensional framework for comprehensive CRTQ assessment. Through a systematic synthesis of existing knowledge and the identification of key theoretical, methodological and empirical gaps on CRTQ, this review offers valuable insights and directions for academics, practitioners and regulators committed to enhancing CRTQ.
