International evidence on the relative importance of the determinants of earnings forecast accuracy |
| |
Authors: | Alain Coë n, Aur lie Desfleurs,Jean-Fran ois L Her |
| |
Affiliation: | aGraduate School of Business (ESG), Université du Québec à Montréal (UQÀM), Case postale 6192, Succursale Centre-Ville, Montréal, Québec, Canada, H3C 4R2;bDepartment of Accounting, Université du Québec en Outaouais (UQO), Gatineau, PQ, Canada, J8X 3X7;cCaisse de dépôt et placement du Québec, Investment Policy Research, Canada |
| |
Abstract: | We analyze earnings forecasting errors made by financial analysts for 18 developed countries over the 1990–2006 period. We use the Heston–Rouwenhorst approach to unravel country-, industry-, and firm-specific effects as a source of variation in financial analysts’ earnings forecast errors. We first estimate each effect with a dummy variable regression, and then decompose the variance of forecast errors into different effects. We provide evidence that the differences between countries, industrial sectors, and analyst-following offer a weak explanation for differences in forecast errors. Country effects however largely dominate industry and analyst-following effects. By contrast, the type of earnings (profits or losses)—and variations in earnings (increases or decreases) play a significant role in the forecast accuracy of financial analysts. |
| |
Keywords: | Analysts’ forecasts Forecast accuracy Forecast bias Industrial structure Country factors Firm-specific factors |
本文献已被 ScienceDirect 等数据库收录! |
|