Does Regulation Fair Disclosure affect analysts' forecast performance? The case of restructuring firms

Beixin Lin, Rong Yang

Research output: Contribution to journalArticlepeer-review

16 Scopus citations


The main purpose of this paper is to investigate how the enactment of Regulation Fair Disclosure (Reg. FD) influences analysts' forecast characteristics for restructuring firms. The Reg. FD requires all firms disseminate material information not only to some institutional investors and certain financial analysts, but to all market participants simultaneously. We expect that the regulatory effect of Reg. FD on financial analysts' forecast performance would be pronounced because of uncertain earnings signals and information complexity produced by restructuring activities. Particularly, we examine how the enactment of Reg. FD affects the relationship between analysts' earnings forecast attributes and the occurrence and magnitude of restructuring charges. Our general finding is that analysts' forecast errors and forecast dispersion have declined in the post-FD period for restructuring firms. However, such an impact cannot be persistent with an increase in the relative magnitude of restructuring charges, the proxy for restructuring complexity. This study provides additional evidence that Reg. FD has limited private information, and attempts to provide all users with the same access to information within the context of firms reporting restructuring charges.

Original languageEnglish
Pages (from-to)495-517
Number of pages23
JournalReview of Quantitative Finance and Accounting
Issue number4
StatePublished - May 2012


  • Analysts' forecast attributes
  • Regulation Fair Disclosure
  • Restructuring charges


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