Group-Affiliated Analysts’ Strategic Forecasts During a Year: Evidence from Korea

Byungjin Kwak and Kyoungwon Mo

Emerging Markets Finance and Trade, 2019, vol. 55, issue 1, 59-77

Abstract: In examining the family-controlled business groups in Korea, prior literature shows that group-affiliated analysts’ forecasts are optimistically biased. This article investigates whether the group-affiliated analysts strategically time the level of accuracy and bias in their forecasts for the same group-affiliated firms due to the change in information asymmetry in the market. The results show that the group-affiliated analysts issue more accurate and less optimistic earnings forecasts for the affiliated firms when the level of information asymmetry is low; particularly, in April, which is right after annual earnings announcements.

Date: 2019
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DOI: 10.1080/1540496X.2018.1505611

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