Abstract
This study investigates management incentives to publish aggressive or conservative earnings forecasts and when management changes its disclosure policy of earnings forecast. Using a sample of 18,580 management forecasts from 2005 to 2011 in Japan, the study finds that firms that grant stock options, recorded a loss in last fiscal year, are expected to perform well from shareholders （the high foreign ownership or high PBR firms）, or raise funds from shareholders publish aggressive forecasts. On the other hand, high debt ratio firms publish conservative forecasts. The study also finds that firms experiencing management turnover or recording a large management forecast error in last fiscal year change their disclosure policy.
