This paper studies an analyst's forecasting strategy and a manager's earnings management policy. When reporting earnings, the manager trades off the disutility he obtains from falling short of the analyst's forecast against the costs of manipulating earnings. The model predicts that: (i) the...

The corporate information environment develops endogenously as a consequence of information asymmetries and agency problems between investors, entrepreneurs, and managers. We review current research on the three main decisions that shape the corporate information environment in capital market...