Corporate characteristics and the voluntary disclosure of forecast information: A study of New Zealand prospectuses

Abstract

This study examines the voluntary disclosure of forecast information in New Zealand prospectuses for initial public offerings of equity securities. Two attributes of forecast information (time span and disaggregation) are defined and the relationships between these two attributes and four corporate characteristics (operating history, company size, inside ownership and industry membership) were investigated. It was found that companies without operating histories provided forecasts which covered longer time spans and were more disaggregated. Farming, fishing and horticulture companies also provided more forecast information. However, the relationships between forecast information disclosure and both company size and inside ownership were insignificant. Overall, the results of the study provide evidence consistent with the proposition that voluntary disclosure in prospectuses is dependent upon the availability of alternative information and uncertainty associated with companies.