Do firms’ exports affect analysts’ forecast errors?

Fu Xin, Shangkun Liang, Jiemin Dai and Xiaorong Du

China Journal of Accounting Studies, 2017, vol. 5, issue 1, 123-150

Abstract: This paper aims to provide insights into the forces and constraints that shape the forecast errors of local analysts when a firm enjoys both domestic and foreign earnings. By applying a unique hand-collect export dataset of Chinese listed firms, the key finding shows that the forecast earnings of exporting firms issued by local analysts deviate more from the actual earnings than those for non-exporting firms. On the contrary, foreign analysts exhibit an informational advantage to local analysts when forecasting the earnings of exporting firms. A two-stage selection model and propensity score matching procedure are applied for correcting the endogeneity problem in a corporate exporting decision. A detailed investigation shows that the forecast errors of local analysts increased significantly during the financial crisis of 2008. Also, the forecast errors of foreign analysts were smaller after the IFRS were been adopted in China than before. Our findings indicate that the accuracy of local analysts may suffer from the macro-economic environment in an export-driven nation.

Date: 2017
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/21697213.2016.1252087 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rcjaxx:v:5:y:2017:i:1:p:123-150

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rcja20

DOI: 10.1080/21697213.2016.1252087

Access Statistics for this article

China Journal of Accounting Studies is currently edited by Xiaochen Dou

More articles in China Journal of Accounting Studies from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().