The power of crowds: can minority shareholder activism promote management earnings forecast accuracy

Novel online activism of minority shareholders could be a new governance mechanism but has received little academic attention. This study examines the impact of such minority shareholder activism on management earnings forecast accuracy. Based on a sample of publicly listed firms in the Chinese Shenzhen Stock Exchange between 2010 and 2018, we find that online activism promotes earnings forecast accuracy. The effect is stronger with more negative media coverage and higher manager response quality. Overall, our results indicate that minority shareholders in China could play a monitoring role when they are empowered with voice in the information age.