We study management forecasts in Japan, where forecasts are effectively mandated but managers have considerable latitude over the numbers they release. We find that managers' initial earnings forecasts for a fiscal year are systematically upward-biased but that they revise their forecasts downward during the fiscal year so that most earnings surprises are non-negative. Managers' initial forecast optimism is inversely related to firm performance, and is more pronounced for firms with higher levels of insider ownership, smaller firms, and firms with a history of forecast optimism. The fact that managers' forecasts tend to be consistently optimistic suggests that reputation effects are insufficient to ensure managerial forecast accuracy. We also find that the information content of managers' forecasts is related to proxies for whether market participants view the forecasts as credible.

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This paper investigates differences in targets overtaken by cross-border bidders versus domestic ones.The literature from the selection theory argues that there is "cherry picking." Put simply, cross-border bidders overtake the comparably better performing targets. In contrast, domestic bidders acquire weaker targets what can be termed as "rescue mission." Targets in the study were investigated to see if this statement holds true.The results show that cross-border targets did not perform better but performed worse than domestic ones. According to my sample, I have to conclude that there is no "cherry picking" of cross-border acquisitions. This lends support to the idea that foreign bidders probably come to the acquisition target at a later stage. To put it differently, Japanese firms were being overtaken by foreign bidders in cases where no domestic firm was interested in overtaking the target. Reasons are discussed.

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