Faculty of Business Seminar Series / Sebahattin Demirkan

Title: Strategic Alliances and Voluntary Management Earnings Guidance Practices

Abstract: We investigate the voluntary earnings guidance behavior of firms that form strategic alliances in variety of earnings performance of the firms. We find that alliance firms use more total disclosures, on average, for good and bad earnings news. However, when we focus on alliance-type, we find that contractual agreements, a type of strategic alliance where parent companies remain separate entities, provide more quantitative and qualitative voluntary management guidance than standalone firms in good and bad news periods. This supports the Guy Samuel and Taylor (2016) study that shows that firms with complex annual reports use voluntary disclosure to help investors obtain information which is the case for alliances firms especially for contractual alliances. But we find that firms in a joint venture, when a new entity is formed, issue less quantitative guidance for all news periods, and do not issue qualitative guidance at a different rate than standalone firms. Our results suggest that intra-organizational form is an important consideration for managers when they weigh not only if they should release guidance but in what form.

Place : Meeting Room AB2-345