This study develops a theoretical model in which the voluntary disclosure of earnings forecast is a double-edged sword. Such disclosure may reduce the information asymmetry between investors and firms but simultaneously allows entrepreneurs create hype. Beginning from 2005 the disclosures of financial forecasts for Taiwanese public companies have not been mandatory, with firms being able to dec...

A Correction to this paper has been published: 10.1007/s11142-021-09623-7