Analysts' Forecasts of Taiwanese Firms' Earnings: Some Empirical Evidence

Li-Chin Jennifer Ho () and Jeffrey Tsay
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Li-Chin Jennifer Ho: P. O. Box 19468, Department of Accounting, College of Business Administration, University of Texas at Arlington, Arlington, Texas 76019-0468, USA
Jeffrey Tsay: University of Texas at Arlington, USA

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2004, vol. 07, issue 04, 571-597

Abstract: This study examines the accuracy and bias associated with the analysts' earnings forecasts of Taiwanese firms. Using the forecast data of individual analysts over 1991–1997 from the I/B/E/S database, we find that analysts' forecasts of earnings are generally more accurate than the predictions of a naïve forecasting model. However, this superiority seems to be largely confined to shorter forecast horizons. We also find that the analysts' earnings forecasts of Taiwanese firms are optimistically biased and that the bias depends on the nature of the earnings news. In addition, analysts' forecasts appear to be more accurate for larger firms and the bias also decreases with firm size. We find some variation in forecast accuracy and bias across industries but the overall results are not driven by any specific time period.

Keywords: Analysts' forecasts; accuracy; bias; Taiwan (search for similar items in EconPapers)
JEL-codes: G1 G2 G3 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (4)

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DOI: 10.1142/S0219091504000238

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