Replication data for:Forward-looking Disclosure and Mispricing

There are two different views on the relationship between forward-looking disclosure (FLD) and mispricing of firm value: one view is that FLD increases the disclosure of private firm information and improves mispricing; the other view is that FLD disclosure is management-adjusted, too much FLD distorts true information and worsens mispricing. This paper examines the relationship between FLD and mispricing using a sample of 15,113 Chinese A-share listed companies. Our findings support that FLD increases transparency and mitigates mispricing. There is a serious endogeneity problem between FLD and mispricing, and our results remain robust to the instrumental variables approach. We find some evidence on an transparency mechanism between FLD and mispricing. Further analysis shows that the effect of FLD on mispricing varies across external environments. For firms with less competitive external product markets and firms with lower marketization processes, more FLD is expected to be more favorable for disclosure.