HOW DO INVESTORS PERCEIVE LONG-TERM GROWTH TARGETS AND FORECAST HORIZONS IN STRATEGIC PLANS? EVIDENCE FROM ITALIAN FIRMS
We examine the information content of strategic-plans’ long-term growth targets (SPLTG) and of strategic-plans’ forecast horizons (SPFH). Using a sample of 224 strategic plan presentations by Italian listed companies during the period 2002–2018, we provide evidence that the SPLTG conveys credible an...
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Format: | Article |
Language: | English |
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World Scientific Publishing
2019-12-01
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Series: | Journal of Financial Management, Markets and Institutions |
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Online Access: | http://www.worldscientific.com/doi/epdf/10.1142/S2282717X1950004X |
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author | GIUSEPPE DI MARTINO |
author_facet | GIUSEPPE DI MARTINO |
author_sort | GIUSEPPE DI MARTINO |
collection | DOAJ |
description | We examine the information content of strategic-plans’ long-term growth targets (SPLTG) and of strategic-plans’ forecast horizons (SPFH). Using a sample of 224 strategic plan presentations by Italian listed companies during the period 2002–2018, we provide evidence that the SPLTG conveys credible and useful information to investors. We also assume that longer forecast horizons are more uncertain and we find that stock price reaction is negatively associated with long-term forecast horizons. Then, we investigate whether SPLTG presented in conjunction with long-term SPFH are perceived as less credible. The findings document that investors perceive long-term growth targets as credible regardless of the SPFH length. Our study contributes to the current debate on the use of strategic plans as comprehensive disclosure able to provide credible and useful information. |
first_indexed | 2024-12-22T17:43:26Z |
format | Article |
id | doaj.art-5aabd817e1954e6497872f794a45c21b |
institution | Directory Open Access Journal |
issn | 2282-717X |
language | English |
last_indexed | 2024-12-22T17:43:26Z |
publishDate | 2019-12-01 |
publisher | World Scientific Publishing |
record_format | Article |
series | Journal of Financial Management, Markets and Institutions |
spelling | doaj.art-5aabd817e1954e6497872f794a45c21b2022-12-21T18:18:21ZengWorld Scientific PublishingJournal of Financial Management, Markets and Institutions2282-717X2019-12-01721950004-11950004-3310.1142/S2282717X1950004X10.1142/S2282717X1950004XHOW DO INVESTORS PERCEIVE LONG-TERM GROWTH TARGETS AND FORECAST HORIZONS IN STRATEGIC PLANS? EVIDENCE FROM ITALIAN FIRMSGIUSEPPE DI MARTINO0University of Bari Aldo Moro, Department of Economics, Management and Business Law, Largo Abbazia Santa Scolastica, 53, 70124 Bari, ItalyWe examine the information content of strategic-plans’ long-term growth targets (SPLTG) and of strategic-plans’ forecast horizons (SPFH). Using a sample of 224 strategic plan presentations by Italian listed companies during the period 2002–2018, we provide evidence that the SPLTG conveys credible and useful information to investors. We also assume that longer forecast horizons are more uncertain and we find that stock price reaction is negatively associated with long-term forecast horizons. Then, we investigate whether SPLTG presented in conjunction with long-term SPFH are perceived as less credible. The findings document that investors perceive long-term growth targets as credible regardless of the SPFH length. Our study contributes to the current debate on the use of strategic plans as comprehensive disclosure able to provide credible and useful information.http://www.worldscientific.com/doi/epdf/10.1142/S2282717X1950004Xforecast horizoninformation contentlong-term growth forecaststrategic planvalue relevance |
spellingShingle | GIUSEPPE DI MARTINO HOW DO INVESTORS PERCEIVE LONG-TERM GROWTH TARGETS AND FORECAST HORIZONS IN STRATEGIC PLANS? EVIDENCE FROM ITALIAN FIRMS Journal of Financial Management, Markets and Institutions forecast horizon information content long-term growth forecast strategic plan value relevance |
title | HOW DO INVESTORS PERCEIVE LONG-TERM GROWTH TARGETS AND FORECAST HORIZONS IN STRATEGIC PLANS? EVIDENCE FROM ITALIAN FIRMS |
title_full | HOW DO INVESTORS PERCEIVE LONG-TERM GROWTH TARGETS AND FORECAST HORIZONS IN STRATEGIC PLANS? EVIDENCE FROM ITALIAN FIRMS |
title_fullStr | HOW DO INVESTORS PERCEIVE LONG-TERM GROWTH TARGETS AND FORECAST HORIZONS IN STRATEGIC PLANS? EVIDENCE FROM ITALIAN FIRMS |
title_full_unstemmed | HOW DO INVESTORS PERCEIVE LONG-TERM GROWTH TARGETS AND FORECAST HORIZONS IN STRATEGIC PLANS? EVIDENCE FROM ITALIAN FIRMS |
title_short | HOW DO INVESTORS PERCEIVE LONG-TERM GROWTH TARGETS AND FORECAST HORIZONS IN STRATEGIC PLANS? EVIDENCE FROM ITALIAN FIRMS |
title_sort | how do investors perceive long term growth targets and forecast horizons in strategic plans evidence from italian firms |
topic | forecast horizon information content long-term growth forecast strategic plan value relevance |
url | http://www.worldscientific.com/doi/epdf/10.1142/S2282717X1950004X |
work_keys_str_mv | AT giuseppedimartino howdoinvestorsperceivelongtermgrowthtargetsandforecasthorizonsinstrategicplansevidencefromitalianfirms |