The Impact of Corporate Downsizing on Analysts' Earnings Forecasts

Corporate downsizing continues to be prevalent, yet we do not fully understand how investors value these decisions. To improve our understanding of how the financial community evaluates these managerial decisions, we examine how investment analysts, important information intermediaries in the financial market, respond to corporate downsizing. Using panel data on S&P 100 companies for the 1990?2000 period, we find that corporate downsizing...