gender differential paper IJCRB

ijcrb.webs.com
INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS
IMPACT OF DISCLOSURE QUALITY OF POINT AND RANGE
FORECASTS ON INVESTOR DECISION
JUNE 2011
VOL 3, NO 2
Ghulam Dastgir
MS-Scholar IQRA University Islamabad
Syed imran Sajjad
MS-Scholar IQRA University Islamabad
Imran khan
MS-Scholar IQRA University Islamabad
Haroon shafi
MS-Scholar IQRA University Islamabad
Dr.Kashif ur Rehman
Faculti member iqra university Islamabad
Abstract
Investor decision is a complex and dynamic phenomenon in behavioral finance. It has been
under consideration by researchers and other stake holders since 1850s. All this effort is
being done to better understand the investment patterns, their mental approach towards
investment choices, and the reasoning patterns. This study will focus on the investor decision
in perspective of disclosure quality and perceived credibility emitting from the
management’s forecasts specifically in the context of range forecasts. It will also allow us to
analyze the decision making process of investors for entrepreneurs, researchers, and besides
other stake holders, investors themselves.
Keywords: Management Forecasts, Point and Range Forecasts, Disclosure Quality,
Perceived Credibility, Investor Decision
Introduction
In this study, we extend prior research on the investment decision in response to
Management and Analysts’ forecast by examining the association between Point and Range
aspect of Management Forecasts and Disclosure Quality and afterwards the affect of this
association on the investors’ choices. Point forecast refers to one possible outcome whereas
on the other hand Range Forecasts depicts multiple and vague possible outcomes making
investor’s reluctant and in the state of confusion while making their investment decision.
Investment Decision is a very complex concept and analytical in nature. Whenever making
an investment choice investors are looking for a mix of information from the information
provided. (Collin Mason & Matthew Stark 2004). Literature also suggests that investor
decision is affected by the information they are looking for (Leonard Karakowsky, A. R.
Elangovan 2001; Collin Mason, Matthew Stark; 2004) the risk propensity of investor’s
(Hongwei Xu, Martin Ruef 2004; Herbert Kalthoff 2005) the disclosure quality and
COPY RIGHT © 2011 Institute of Interdisciplinary Business Research 1737