The Spillover Effects of Exogenous Events on Management Forecasts: Evidence From U.S. Major Hurricanes

ABSTRACT We examine how peer firms outside hurricane‐affected regions respond through management forecasts. Hurricanes weaken affected firms and create opportunities for unaffected peers, which may attract investor attention and reduce heightened uncertainty. Consistent with a cost–benefit trade‐off, peers increase forecast frequency when disclosure benefits are greater, particularly with stronger external‐financing needs and investor attention, but respond less when proprietary costs, litigation risk, or financial constraints are higher. More frequent forecasting is associated with greater visibility and shifts in market share, suggesting that management forecasts operate as strategic signals that strengthen peers' competitive positioning after disasters.