The association of ownership structure and the management earnings forecast: The case of Malaysian initial public offerings (IPOs)

This study investigate the association of different types of ownership structure and the performance of the firm in meeting the earnings forecasts in the context of mandatory earnings forecasts disclosure requirement. The analysis was tested on a sample of 94 IPO prospectuses published from January 2004 to 30^th April 2008. With the mean forecast errors of -7.29%, the result indicates that on average, Malaysian IPO companies managed to meet ±10 percent forecast error tolerance level. 59 sample companies (62.7%) are meeting the Bursa Malaysia regulatory limit of ±10 percent tolerance level. OLS regression results exhibits that only management ownership is significantly associated with forecast errors.