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The impact of strategic deviance on analysts’ earnings forecasts: evidence from China

Xiqiong He (School of Securities and Futures, Southwestern University of Finance and Economics, Chengdu, China)
Changping Yin (Accounting School, Chongqing University of Technology – Huaxi Campus, Chongqing, China)

Nankai Business Review International

ISSN: 2040-8749

Article publication date: 17 December 2018

Issue publication date: 15 August 2019




The purpose of this paper is to explore the effect of firm’s deviant strategy on analysts’ earnings forecasts and further examine the effects of firm’s information transparency and environmental uncertainty on these relationships from information asymmetry perspective.


The sample includes listed firms on Shanghai and Shenzhen Stock Exchange during the period 2007-2013.


The results indicate that firms’ deviant strategies have effects on analysts’ earnings forecasts, in particular, firms with extreme strategies have less analysts following, larger forecast error and dispersion compared with firms following industry norms. Moreover, information transparency and environmental uncertainty have effects on the relationship between strategic deviance and analysts’ earnings forecasts.

Practical implications

The empirical results of this paper provide strong evidence that strategy information is an important source of information for analysts’ earnings forecasts, which shows that analysts should pay attention to not only financial information but also the strategic information, especially when the information is related to strategic choice. In addition, it is necessary for investors to focus on strategic information to have a better understanding on financial information of enterprises and make better investment decisions.


The findings of this study indicate that corporate strategic deviance has an effect on analysts’ earnings forecasting behavior. This study enriches research studies on corporate strategy and external stakeholders and complements related research on analysts’ earnings forecasts from strategic perspective and information asymmetry perspective.



He, X. and Yin, C. (2019), "The impact of strategic deviance on analysts’ earnings forecasts: evidence from China", Nankai Business Review International, Vol. 10 No. 3, pp. 362-381.



Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

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