Circuit courts and capital market transparency: Evidence from analysts’ earnings forecasts

Shen Tang, Chuan Qin and Feng Qi

Finance Research Letters, 2025, vol. 77, issue C

Abstract: This study examines how judicial quality enhancements, such as the establishment of circuit courts, affect analysts’ profits projection quality for Chinese A-share listed companies (2010–2021). A staggered difference-in-differences model shows that circuit courts significantly reduce forecast errors and dispersion, improving corporate disclosure transparency and reducing information asymmetry. Heterogeneity analysis reveals that these effects are particularly prominent in large and high-leverage firms. Moreover, the moderating role of internal control, management expenses, and disclosure quality emphasizes the importance of circuit courts in promoting financial transparency. Findings provide guidance for optimizing judicial systems, strengthening governance, and improving disclosure standards.

Keywords: Judicial quality; Circuit court; Analyst earnings forecast; Information disclosure; Corporate governance (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:77:y:2025:i:c:s1544612325004131

DOI: 10.1016/j.frl.2025.107150

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