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I explore whether participation on Estimize.com, a crowdsourced earnings-forecasting platform aimed primarily at novices, improves professional analysts’ forecast accuracy and career outcomes. Estimize provides its contributors with frequent and timely feedback on their forecast performance and offers them a new channel for disseminating their forecasts to a wider public, features that could help analysts improve their forecast accuracy and raise their online visibility. Using proprietary data obtained from Estimize and a difference-in-differences research design, I find that IBES analysts who are active on Estimize improve their EPS forecast accuracy by 13% relative to the sample-mean forecast error, as well as reduce forecast bias. These improvements in performance vary predictably in ways consistent with learning through feedback. Additionally, I find increased market reaction to the positive earnings-forecasts revisions issued by analysts who are active on Estimize. I also find that analysts active on Estimize enjoy incremental positive career outcomes after controlling for forecast accuracy. My results suggest that professional analysts can learn to become better forecasters through online feedback and consequently garner more attention from the market. My results also suggest analysts can improve their career outcomes by gaining additional online visibility. / Business Administration/Accounting

Structural changes in the knowledge economy have greatly affected the way business is conducted and the processes firms create value. The financial reporting system is inadequate as a result of such changes, and disclosure of intellectual capital (IC) information has gained importance for communicating with capital markets. Empirical research documents corporate governance (CG) factors influencing IC disclosure practices, as well as demonstrates the value-relevance and predictive power of IC information. The disclosure of IC information by listed firms is a topic that has attracted considerable attention from contemporary researchers, but scant empirical evidence exists. Much of the researchers has examined CG as a key determinant of IC (and nonfinancial) disclosure; in contrast, few provides evidence for explaining their controversial findings of board independence on disclosure. In addition, a lack of studies confirms the literature about the use of IC information by capital market participants. Therefore, this thesis aims to examine disclosure of IC information in relation to outside directors, auditors, and sell-side analysts respectively. The specific objectives of this thesis are to examine whether outside directors’ expertise is a determinant of IC disclosure; and the extent to which the disclosure of IC information impacts on audit effort and analysts’ forecasts. In order to address these research objectives, a content analysis of IC disclosure (a self-constructed index of 64 coded items) in strategic reports released by FTST 350 companies is used. The content analysis captures and measures IC disclosure by category (i.e., human, structural & relational capital), notion (i.e., static vs. dynamic), and connection (i.e., across categories vs. with strategies). Using multivariate regression models that were primarily developed upon information asymmetry arguments and agency theory, the specific objectives of this thesis are addressed in three empirical chapters. The findings in Chapter 3 showed that proportion of outside directors (NEDs) with cross-directorship, nonaccounting and academia expertise has a positive association with IC disclosures, whereas board independence itself has no effect on the disclosures. The findings indicates that the monitoring role of NEDs alone is inadequate in promoting IC disclosure. Rather, it supports the importance of the dual role (i.e., monitor and advisory) of a supervisory board. The results also respond to the UK CG Code in their recommendation that the combination of skills, experience and knowledge guarantees a sound information environment to the market. Nonetheless, findings raised a further concern about the quantity of IC disclosures when companies have more NEDs with accounting expertise. On whether and how disclosure of IC information impacts on audit effort, Chapter 4 found that firms with high levels of IC disclosure in the previous year pay more audit fees (proxied for audit effort) in the current year regardless of their earnings quality conditions. It was also found that firms greatly disclosing dynamic IC information are charged more than those of focusing on static IC disclosure. In addition, findings in Chapter 5 revealed that there is a negative relation between IC disclosure and analyst forecast errors, indicating that UK sell-side analysts appreciate the disclosure of IC information and thus confirming that IC information has predictive ability of explaining a firm’s future value. It was further identified that disclosed IC information absorbs the negative effect of concentrated executive ownership and opaque financial environment. Overall, the results of this thesis suggest that IC reporting process could be improved by having sufficient outside directors with certain types of expertise on the board. In doing so, improved IC disclosure helps to reduce information asymmetry (proxied by analyst forecast accuracy) between firms and outside investors, albeit firms bear a significant increase in audit fees. This study calls for guidelines for IC disclosure in the UK and the support of assurance services to enhance credibility of firm-provided IC information in a bid to promote the communication of IC information with the capital market.