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Korean Academic Society of Business Administration
[ Article ]
korean management review - Vol. 52, No. 3, pp.755-776
ISSN: 1226-1874 (Print)
Print publication date 30 Jun 2023
Received 13 Oct 2022 Revised 02 May 2023 Accepted 03 May 2023
DOI: https://doi.org/10.17287/kmr.2023.52.3.755

The Effect of Co-CEO Structure on the Likelihood and Accuracy of Management Forecasts

Jae Eun Shin ; Gun Lee
(First Author) Korea University of Technology & Education jeshin@koreatech.ac.kr
(Corresponding Author) Changwon National University gunlee@changwon.ac.kr
복수경영자 구조가 경영자 예측정보 공시여부 및 정확성에 미치는 영향


Copyright 2011 THE KOREAN ACADEMIC SOCIETY OF BUSINESS ADMINISTRATION
This is an open access article distributed under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

This paper examines the relationship between co-CEO structure and management forecast. Using 22,221 firm-year observations from year 2002 to 2019, we find the following results. First, we find a positive relation between co-CEO structure and the likelihood of management forecast issuance. Specifically, we find that firms with a co-CEO structure are more likely to issue a forecast for sales and operating earnings. Second, we find a negative relation between co-CEO structure and forecast error. The forecast error for sales, operating earnings, and earnings appears to be smaller for firms with a co-CEO structure compared to firms with a sole-CEO structure. Our results are consistent with co-CEOs having higher quality of private information compared to sole-CEOs, and co-CEOs delivering more forecasts to signal their ability in anticipation of future performance.

Keywords:

Co-CEO structure, Managerial forecasts, Forecast likelihood, Forecast accuracy

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∙ The author Jae Eun Shin is an assistant professor at School of Industrial Management, Korea University of Technology & Education. Her research interests include earnings informativeness, earnings management, and corporate governance.

∙ The author Gun Lee is an associate professor at Accounting Department, Changwon National University. His research interests are corporate governance and corporate disclosure.