Institut für Unternehmensrechnung und Controlling




Conservative Traits and Managerial Forecasting Style

Autoren/Herausgeber: Bormann, Sara
Claassen, Debbie
Hofmann, Christian
Schwaiger, Nina
Erschienen: 2020
Publikationsart: Articles in Refereed Journals (International)
Weitere Quellenangabe: 90(3): 335–368
Zusatzinformation: Journal of Business Economics

We investigate whether conservatism as a personality trait, measured by managers’ signatures, influences managers’ forecasting style. Building on upper echelons theory and psychology literature, we predict that conservative personality traits such as the resistance to change and the ensuing cautiousness in updating beliefs influence managers’ forecasts. Our findings suggest that conservative CFOs more likely select earnings as compared to revenues as the main KPI of the forecast, keep the same KPI across years, and issue specific forecasts. Finally, we provide some evidence that conservative CFOs issue more accurate forecasts.