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Research

Mario Schabus

Essays on Forecasting and Misreporting

This dissertation examins two relevant topics for managers and capital market participants, namely firms’ forecasting and their reporting choices. Increasing our understanding of firms forecasting practices is relevant as we learn about the means of firms to assess economic uncertainty. The findings presented in chapter 2 suggest that well-connected board members are able to provide managers with information about macroeconomic or industry-wide developments, which facilitates the quality of managers forecasts. These findings indicate the importance of directors’ advisory role, as opposed to their well-studied monitoring duties. In chapter 4, I show how forecasting processes interplay with managers reporting choices. The results indicate that more elaborate forecasting processes lead to less misreporting, suggesting that focus on forecasting processes reduces the need for potentially costly misreporting at the end of the fiscal year. In chapter 3, I examine the impact of firm-initiated clawbacks on the firm’s incentive compensation design decisions. The results suggest that the increased misreporting costs enable firms to increase the incentives for productive effort while at the same time safeguarding financial reporting integrity. I examine the research questions outlined in this dissertation by means of standard as well as more sophisticated microeconometric techniques. I collect data of U.S.-listed firms from public available sources. The data collected of Dutch firms are confidential and were collected by means of a survey. This dissertation contains three stand-alone studies, where two are co-authored with my promoter Frank Verbeeten and my co-promoter Peter Kroos.

Mario Schabus

Supervisor: dr. Peter Kroos

Supervisor: dr. Frank Verbeeten MBA

Dissertation Mario Schabus (6-9-2017)