Business Life Cycle and Strategic Communication: Effects on Analysts’ Forecasts
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Patrícia Pain
Márcia Bianchi
Abstract
Objective: this study investigates the influence of organizational life cycle stages on the relationship between corporate voluntary disclosures and the accuracy of earnings forecasts made by financial analysts. Theoretical approach: information asymmetry, according to agency theory, generates conflicts between managers and investors. Complementarily, signaling theory suggests that the communication of private information can help bridge this gap. Financial analysts interpret these signals, aligning expectations, mitigating conflicts, and enhancing market decisions by reducing monitoring costs. Methods: a total of 472 annual reports and 1,723 observations from 61 companies listed on the B3 stock exchange (2010–2020) were analyzed using a checklist, descriptive statistics, group comparison tests, and logit and OLS regressions. Results: the findings indicate that voluntary disclosure affects the accuracy of analysts’ forecasts in distinct ways. The disclosure of strategic and performance-related information increases informational complexity, particularly during periods of growth and turbulence, reflecting challenges in aligning stakeholder interests. Conversely, voluntary disclosures related to social responsibility and sustainability facilitate understanding of the company’s conditions, aiding analysts in contexts of greater uncertainty, such as during the turbulence and decline stages of the organizational life cycle. Conclusion: the organizational life cycle moderates the relationship between voluntary disclosure and the quality of analysts’ forecasts, underscoring the importance of managers tailoring their disclosure strategies to meet the informational demands of each stage, reduce uncertainties, and promote better alignment with market interests.
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Pain, P., & Bianchi, M. (2025). Business Life Cycle and Strategic Communication: Effects on Analysts’ Forecasts. Journal of Contemporary Administration, 29(3), e240168. https://doi.org/10.1590/1982-7849rac2025240168.en
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References
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Bolliger, G. (2004). The characteristics of individual analysts’ forecasts in Europe. Journal of Banking & Finance, 28(9), 2283-2309. https://doi.org/10.1016/j.jbankfin.2003.09.011
Boshnak, H. A. (2022). Determinants of corporate social and environmental voluntary disclosure in Saudi listed firms. Journal of Financial Reporting and Accounting, 20(3-4), 667-692. https://doi.org/10.1108/JFRA-05-2020-0129
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Dalmácio, F. Z., Lopes, A. B., Rezende, A. J., & Sarlo, A., Neto. (2013). Uma análise da relação entre governança corporativa e acurácia das previsões dos analistas do mercado brasileiro. Revista de Administração Mackenzie, 14(5), 104-139. https://doi.org/10.1590/S1678-69712013000500005
Dalmácio, F. Z., Rezende, A. J., & Santos, R. B. (2020). Mecanismos de governança corporativa e recomendações dos analistas de mercado: Novas evidências a partir da perspectiva da Teoria da Sinalização. Revista Universo Contábil, 16(3), 121-139. http://dx.doi.org/10.4270/ruc2020318
Deegan, C. (2002). The legitimising effect of social and environmental disclosures: A theoretical foundation. Accounting, Auditing & Accountability Journal, 15(3), 282-311. https://doi.org/10.1108/09513570210435852
Dickinson, V. (2011). Cash flow patterns as a proxy for firm life cycle. The Accounting Review, 86(6), 1969-1994. https://doi.org/10.2308/accr-10130
Domingues, J. C. A., & Nakao, S. H. (2017). Previsão dos analistas e adoção dos padrões IFRS em petrolíferas mundiais. Revista Universo Contábil, 13(2), 6-24. https://doi.org/10.4270/ruc.2017206
Eisenhardt, K. M. (1989). Agency theory: An assessment and review. Academy of management review, 14(1), 57-74. https://doi.org/10.2307/258191
Esqueda, O. A., & O’Connor, T. (2020). Corporate governance and life cycles in emerging markets. Research in International Business and Finance, 51, 1-24. https://doi.org/10.1016/j.ribaf.2019.101077
Fávero, L. P., & Belfiore, P. (2024). Manual de Análise de Dados – Estatística e Machine Learning com Excel®, SPSS®, Stata®, R® e Python® (2ª ed.). GEN, LTC
Filatotchev, I., Toms, S., & Wright, M. (2006). The firm’s strategic dynamics and corporate governance life cycle. International Journal of Managerial Finance, 2(4), 256- 279. http://dx.doi.org/10.1108/17439130610705481
Graaf, J. (2023). Can sell-side analysts compete using public information? Analysts as frame-makers revisited. European Accounting Review, 32(1), 141–167. https://doi.org/10.1080/09638180.2021.1942945
Healy, P. M., & Palepu, K. G. (2001). Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature. Journal of Accounting and Economics, 31(1-3), 405-440. https://doi.org/10.1016/s0165-4101(01)00018-0
Imam, S., & Spence, C. (2016). Context, not predictions: A field study of financial analysts. Accounting, Auditing & Accountability Journal, 29(2), 226–247. https://doi.org/10.1108/AAAJ-02-2014-1606
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X
Jiao, T., Koning, M., Mertens, G., & Roosenboom, P. (2012). Mandatory IFRS adoption and its impact on analysts’ forecasts. International Review of Financial Analysis, 21, 56-63. https://doi.org/10.1016/j.irfa.2011.05.006
Lang, M., & Lundholm, R. (1993). Cross-sectional determinants of analyst ratings of corporate disclosures. Journal of Accounting Research, 31(2), 246. http://www.jstor.org/stable/2491273
Lima, A. S., Carvalho, E. V. A., Paulo, E., & Girão, L. F. A. P. (2015). Estágios do Ciclo de Vida e Qualidade das Informações Contábeis no Brasil. Revista de Administração Contemporânea, 19(3), 398-418. https://doi.org/10.1590/1982-7849rac20151711
Lorenz, T., & Homburg, C. (2018). Determinants of analysts’ revenue forecast accuracy. Review of Quantitative Finance and Accounting, 51, 389-431. https://doi.org/10.1007/s11156-017-0675-4
Martinez, A. L. (2004). Analisando os analistas: Estudo empírico das projeções de lucros e das recomendações dos analistas de mercado de capitais para as empresas brasileiras de capital aberto. [Tese de Doutorado, Fundação Getúlio Vargas]. https://bibliotecadigital.fgv.br/dspace/handle/10438/2464
Martinez, A. L., & Dumer, M. C. R. (2014). Adoption of IFRS and the Properties of Analysts’ Forecasts: The Brazilian Case. Revista de Contabilidade e Organizações, 20, 3-16. https://doi.org/10.11606/rco.v8i20.55459
Mikosz, K. S. C., Roma, C. M. S., Louzada, L. C., & Macedo, M. R. G. O. (2019). Previsão de retornos e preços das ações a partir de dados contábeis condicionada ao ciclo de vida das firmas. Revista de Contabilidade e Organizações, 13, 1-15. https://doi.org/10.11606/issn.1982-6486.rco.2019.160869
Milgrom, P., & Roberts, J. (1992). Economics, organization and management. Prentice Hall.
Murcia, F. D. R., & Santos, A. (2009). Fatores determinantes do nível de divulgação voluntária das companhias abertas no Brasil. Revista de Educação e Pesquisa em Contabilidade, 3(2), 72-95. https://doi.org/10.17524/repec.v3i2.68
Novaes, P. V., & Almeida, J. E. (2020). The role of firms’ life cycle stages on voluntary disclosure and cost of equity capital in Brazilian public companies. Brazilian Business Review, 17, 601-620. https://doi.org/10.15728/bbr.2020.17.6.1
Oliveira, A. S., & Girão, L. F. A. (2018). Acurácia na previsão de lucros e os estágios do ciclo de vida organizacional: Evidências no mercado brasileiro de capitais. Revista de Educação e Pesquisa em Contabilidade, 1(7), 121-144. https://doi.org/10.17524/repec.v12i1.1530
Rodrigues, E. S., Freitas, C., & Quental, V. (2013). Análise de inteligibilidade textual por meio de ferramentas de processamento automático do português: Avaliação da Coleção Literatura para Todos. Letras de Hoje, 48(1), 91-99. https://revistaseletronicas.pucrs.br/ojs/index.php/fale/article/view/12048/0
Rossignoli, F., Stacchezzini, R. & Lai, A. (2022). Financial analysts’ reaction to voluntary integrated reporting: cross-sectional variation in institutional enforcement contexts. Journal of Applied Accounting Research, 23(1), 29-54. https://doi.org/10.1108/JAAR-04-2021-0112
Rouf, M. A., & Siddique, M.N.-E. (2022). Theories applied in corporate voluntary disclosure: A literature review. Journal of Entrepreneurship and Public Policy, 12(1), 49–68. https://doi.org/10.1108/JEPP-01-2022-0007
Rufino, M. A., & Monte, P. A. (2014). Fatores que explicam a divulgação de informações voluntárias das 100 empresas com ações mais negociadas na BM&Fbovespa. Sociedade, Contabilidade e Gestão, 9(3), 59-75. https://doi.org/10.21446/scg_ufrj.v9i3.13332
Schiemann, F., & Tietmeyer, R. (2022). ESG controversies, ESG disclosure and analyst forecast accuracy. International Review of Financial Analysis, 84, 102373. https://doi.org/10.1016/j.irfa.2022.102373
Venturini, L. D. B., Bianchi, M., Machado, V. N., & Paulo, E. (2022). Conteúdo informacional dos principais assuntos de auditoria e a previsão dos analistas financeiros. Revista Contabilidade e Finanças, 33(89), 281-299. https://doi.org/10.1590/1808-057x2021130
Yang, Y., Jiang, Y., Jia, F., & Chen, L. (2023). The impact of supplier instability on corporate social responsibility performance over the firm lifecycle: A social systems theory perspective. British Journal of Management, 34(3), 1259–1281. https://doi.org/10.1111/1467-8551.12651
Zamil, I. A., Ramakrishnan, S., Jamal, N. M., Hatif, M. A., & Khatib, S. F. A. (2023). Drivers of corporate voluntary disclosure: A systematic review. Journal of Financial Reporting and Accounting, 21(2), 232–267. https://doi.org/10.1108/JFRA-04-2021-01
Akerlof, G. (1970). The Market for “lemons”: Qualitative uncertainty and the market mechanism. Quartely Journal of Economics, 84, 488-500. https://doi.org/10.2307/1879431
Almeida, J. E. F., & Rodrigues, H. S. (2017). Effects of IFRS, analysts, and ADR on voluntary disclosure of Brazilian public companies. Journal of International Accounting Research, 16(1), 21–35. https://doi.org/10.2308/jiar-51649
Birjandi, H., Hakemi, B., & Sadeghi, M. M. M. (2015). The study effect agency theory and signaling theory on the level of voluntary disclosure of listed companies in Tehran Stock Exchange. Research Journal of Finance and Accounting, 6(1), 174-185. https://core.ac.uk/download/pdf/234630404.pdf
Bispo, M. S. (2021). Reflecting on contemporary Administration. Revista de Administração Contemporânea, 26(1), e210203. https://doi.org/10.1590/1982-7849rac2022210203.en
Bolliger, G. (2004). The characteristics of individual analysts’ forecasts in Europe. Journal of Banking & Finance, 28(9), 2283-2309. https://doi.org/10.1016/j.jbankfin.2003.09.011
Boshnak, H. A. (2022). Determinants of corporate social and environmental voluntary disclosure in Saudi listed firms. Journal of Financial Reporting and Accounting, 20(3-4), 667-692. https://doi.org/10.1108/JFRA-05-2020-0129
Bregonci, L. V., Marques, V. A., Pinto, B. M. M., & Amaral, H. F. (2023). Estágios do Ciclo de Vida e Maturidade da Dívida em Empresas Brasileiras Listadas. BBR.Brazilian Business Review, 20, 407–425. https://doi.org/10.15728/bbr.2022.1223.pt
Brown, L. D., Call, A. C., Clement, M. B., & Sharp, N. Y. (2015). Inside the “Black Box” of Sell-Side Financial Analysts. Journal of Accounting Research, 53(1), 1–47. https://doi.org/10.1111/1475-679X.12067
Carvalho, V. G., & Paulo, E. (2020). Influência do tax management e tax aggressiveness na qualidade da previsão do lucro das companhias abertas brasileiras. Revista Inovar Contábil, 1(1), 53-72. https://crcrn.org.br/revistainovar/index.php/home/article/view/7
Correa, J. C., Gonçalves, M. N., Sanches, S. L. R., & Moraes, R. O. (2017). Disclosure socioambiental de empresas norte-americanas listadas na Nyse: Características e os possíveis fatores para a divulgação voluntária. Contabilidade Vista & Revista, 28(2), 53-77. https://revistas.face.ufmg.br/index.php/contabilidadevistaerevista/article/view/4653
Costa, W. B., Macedo, M. A. S., Yokoyama, K. Y., & Almeida, J. E. F. (2017). Análise dos estágios de ciclo de vida de companhias abertas no Brasil: Um estudo com base em variáveis contábil-financeiras. Brazilian Business Review, 14(3), 304-320. https://doi.org/10.15728/bbr.2017.14.3.3
Dalmácio, F. Z., Lopes, A. B., Rezende, A. J., & Sarlo, A., Neto. (2013). Uma análise da relação entre governança corporativa e acurácia das previsões dos analistas do mercado brasileiro. Revista de Administração Mackenzie, 14(5), 104-139. https://doi.org/10.1590/S1678-69712013000500005
Dalmácio, F. Z., Rezende, A. J., & Santos, R. B. (2020). Mecanismos de governança corporativa e recomendações dos analistas de mercado: Novas evidências a partir da perspectiva da Teoria da Sinalização. Revista Universo Contábil, 16(3), 121-139. http://dx.doi.org/10.4270/ruc2020318
Deegan, C. (2002). The legitimising effect of social and environmental disclosures: A theoretical foundation. Accounting, Auditing & Accountability Journal, 15(3), 282-311. https://doi.org/10.1108/09513570210435852
Dickinson, V. (2011). Cash flow patterns as a proxy for firm life cycle. The Accounting Review, 86(6), 1969-1994. https://doi.org/10.2308/accr-10130
Domingues, J. C. A., & Nakao, S. H. (2017). Previsão dos analistas e adoção dos padrões IFRS em petrolíferas mundiais. Revista Universo Contábil, 13(2), 6-24. https://doi.org/10.4270/ruc.2017206
Eisenhardt, K. M. (1989). Agency theory: An assessment and review. Academy of management review, 14(1), 57-74. https://doi.org/10.2307/258191
Esqueda, O. A., & O’Connor, T. (2020). Corporate governance and life cycles in emerging markets. Research in International Business and Finance, 51, 1-24. https://doi.org/10.1016/j.ribaf.2019.101077
Fávero, L. P., & Belfiore, P. (2024). Manual de Análise de Dados – Estatística e Machine Learning com Excel®, SPSS®, Stata®, R® e Python® (2ª ed.). GEN, LTC
Filatotchev, I., Toms, S., & Wright, M. (2006). The firm’s strategic dynamics and corporate governance life cycle. International Journal of Managerial Finance, 2(4), 256- 279. http://dx.doi.org/10.1108/17439130610705481
Graaf, J. (2023). Can sell-side analysts compete using public information? Analysts as frame-makers revisited. European Accounting Review, 32(1), 141–167. https://doi.org/10.1080/09638180.2021.1942945
Healy, P. M., & Palepu, K. G. (2001). Information asymmetry, corporate disclosure, and the capital markets: A review of the empirical disclosure literature. Journal of Accounting and Economics, 31(1-3), 405-440. https://doi.org/10.1016/s0165-4101(01)00018-0
Imam, S., & Spence, C. (2016). Context, not predictions: A field study of financial analysts. Accounting, Auditing & Accountability Journal, 29(2), 226–247. https://doi.org/10.1108/AAAJ-02-2014-1606
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305–360. https://doi.org/10.1016/0304-405X(76)90026-X
Jiao, T., Koning, M., Mertens, G., & Roosenboom, P. (2012). Mandatory IFRS adoption and its impact on analysts’ forecasts. International Review of Financial Analysis, 21, 56-63. https://doi.org/10.1016/j.irfa.2011.05.006
Lang, M., & Lundholm, R. (1993). Cross-sectional determinants of analyst ratings of corporate disclosures. Journal of Accounting Research, 31(2), 246. http://www.jstor.org/stable/2491273
Lima, A. S., Carvalho, E. V. A., Paulo, E., & Girão, L. F. A. P. (2015). Estágios do Ciclo de Vida e Qualidade das Informações Contábeis no Brasil. Revista de Administração Contemporânea, 19(3), 398-418. https://doi.org/10.1590/1982-7849rac20151711
Lorenz, T., & Homburg, C. (2018). Determinants of analysts’ revenue forecast accuracy. Review of Quantitative Finance and Accounting, 51, 389-431. https://doi.org/10.1007/s11156-017-0675-4
Martinez, A. L. (2004). Analisando os analistas: Estudo empírico das projeções de lucros e das recomendações dos analistas de mercado de capitais para as empresas brasileiras de capital aberto. [Tese de Doutorado, Fundação Getúlio Vargas]. https://bibliotecadigital.fgv.br/dspace/handle/10438/2464
Martinez, A. L., & Dumer, M. C. R. (2014). Adoption of IFRS and the Properties of Analysts’ Forecasts: The Brazilian Case. Revista de Contabilidade e Organizações, 20, 3-16. https://doi.org/10.11606/rco.v8i20.55459
Mikosz, K. S. C., Roma, C. M. S., Louzada, L. C., & Macedo, M. R. G. O. (2019). Previsão de retornos e preços das ações a partir de dados contábeis condicionada ao ciclo de vida das firmas. Revista de Contabilidade e Organizações, 13, 1-15. https://doi.org/10.11606/issn.1982-6486.rco.2019.160869
Milgrom, P., & Roberts, J. (1992). Economics, organization and management. Prentice Hall.
Murcia, F. D. R., & Santos, A. (2009). Fatores determinantes do nível de divulgação voluntária das companhias abertas no Brasil. Revista de Educação e Pesquisa em Contabilidade, 3(2), 72-95. https://doi.org/10.17524/repec.v3i2.68
Novaes, P. V., & Almeida, J. E. (2020). The role of firms’ life cycle stages on voluntary disclosure and cost of equity capital in Brazilian public companies. Brazilian Business Review, 17, 601-620. https://doi.org/10.15728/bbr.2020.17.6.1
Oliveira, A. S., & Girão, L. F. A. (2018). Acurácia na previsão de lucros e os estágios do ciclo de vida organizacional: Evidências no mercado brasileiro de capitais. Revista de Educação e Pesquisa em Contabilidade, 1(7), 121-144. https://doi.org/10.17524/repec.v12i1.1530
Rodrigues, E. S., Freitas, C., & Quental, V. (2013). Análise de inteligibilidade textual por meio de ferramentas de processamento automático do português: Avaliação da Coleção Literatura para Todos. Letras de Hoje, 48(1), 91-99. https://revistaseletronicas.pucrs.br/ojs/index.php/fale/article/view/12048/0
Rossignoli, F., Stacchezzini, R. & Lai, A. (2022). Financial analysts’ reaction to voluntary integrated reporting: cross-sectional variation in institutional enforcement contexts. Journal of Applied Accounting Research, 23(1), 29-54. https://doi.org/10.1108/JAAR-04-2021-0112
Rouf, M. A., & Siddique, M.N.-E. (2022). Theories applied in corporate voluntary disclosure: A literature review. Journal of Entrepreneurship and Public Policy, 12(1), 49–68. https://doi.org/10.1108/JEPP-01-2022-0007
Rufino, M. A., & Monte, P. A. (2014). Fatores que explicam a divulgação de informações voluntárias das 100 empresas com ações mais negociadas na BM&Fbovespa. Sociedade, Contabilidade e Gestão, 9(3), 59-75. https://doi.org/10.21446/scg_ufrj.v9i3.13332
Schiemann, F., & Tietmeyer, R. (2022). ESG controversies, ESG disclosure and analyst forecast accuracy. International Review of Financial Analysis, 84, 102373. https://doi.org/10.1016/j.irfa.2022.102373
Venturini, L. D. B., Bianchi, M., Machado, V. N., & Paulo, E. (2022). Conteúdo informacional dos principais assuntos de auditoria e a previsão dos analistas financeiros. Revista Contabilidade e Finanças, 33(89), 281-299. https://doi.org/10.1590/1808-057x2021130
Yang, Y., Jiang, Y., Jia, F., & Chen, L. (2023). The impact of supplier instability on corporate social responsibility performance over the firm lifecycle: A social systems theory perspective. British Journal of Management, 34(3), 1259–1281. https://doi.org/10.1111/1467-8551.12651
Zamil, I. A., Ramakrishnan, S., Jamal, N. M., Hatif, M. A., & Khatib, S. F. A. (2023). Drivers of corporate voluntary disclosure: A systematic review. Journal of Financial Reporting and Accounting, 21(2), 232–267. https://doi.org/10.1108/JFRA-04-2021-01