Voluntary disclosure of corporate performance targets

PhD ceremony: Mr. J. Impink, 11.00 uur, Academiegebouw, Broerstraat 5, Groningen

Title: Voluntary disclosure of corporate performance targets

Promotor(s): prof. C. Cools, prof. J.F.M.G. Bouwens

Faculty: Economics and Business

Mandatory disclosure conveys information about past events whereas many investors seek or demand more timely information that is relevant for decision making and control. Hence, some companies voluntarily disclose forward looking information. This dissertation sheds more light on corporate performance targets through three studies. The first study examines the Dutch setting in which more than half of the listed firms disclose one or more targets. As expected, firms that meet their target(s) perform better than other firms. In addition, firms that miss their target(s) still perform better than firms that had not issued any targets. The second and third studies compare management forecasts with management targets by examining firms listed in the U.S. The results indicate that the stock market strongly reacts to targets, and that this reaction is concentrated at the time of the announcement.