Managerial learning from analyst feedback enhances investment efficiency and firm performance

What is it about?

We provide evidence that by voluntarily issuing capex guidance, managers create a learning feedback loop that enables them to enhance capital investment efficiency and firm performance, which thereby explains why they voluntarily issue capex guidance.

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Why is it important?

This study is important for several reasons. First, it documents managerial learning from analysts that previous studies denied. Second, it helps explain why managers voluntarily issue capex guidance with a frequency and continuity comparable with that of earnings guidance. Third, it explains managerial learning from analysts in a context where the potential for managerial learning from share price reactions is limited, as we also explain.