The Influence mechanism of online communication on analysts' forecast bias: Based on earnings management

Yiwan Huang and Zhanbin Feng

Finance Research Letters, 2025, vol. 82, issue C

Abstract: Utilizing a dataset spanning from 2018 to 2023 of China's A-share listed companies, this study delves into the effects of online communication on analysts' forecasts. It examines the mediating roles of earnings management and information disclosure in this context. The findings reveal that analysts exhibit significantly higher forecast bias after engaging in online communication compared to non-participants. Nonetheless, online research, as an efficient means of information exchange, allows firms to better understand analysts' concerns and forecasting bases, enabling them to adjust earnings management strategies in a targeted manner to influence analysts' forecasts. Additionally, online research enhances the breadth and depth of corporate disclosure, providing analysts with a more abundant information source and subsequently improving forecast accuracy. This study underscores the multifaceted impact of online communication on analysts' forecasts, offering valuable insights for companies to optimize their interactions with analysts and elevate the quality of information disclosure amidst the digital era.

Keywords: Online communication; Analyst forecasting; Earnings management (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:82:y:2025:i:c:s1544612325007871

DOI: 10.1016/j.frl.2025.107528

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