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The purpose of this study is to examine whether and how analysts’ foreign ancestral origins would have an effect on analysts’ earning forecasts in particular and ultimately on firms’ information environment in general.

By inferring analysts’ ancestral countries based on their surnames, this study empirically examines whether analysts’ ancestral countries affect their earnings forecast errors.

Using novel data on analysts’ foreign ancestral origins from more than 110 countries, this study finds that relative to analysts with common American surnames, analysts with common foreign surnames tend to have higher earnings forecast errors. The positive relation between analyst foreign surnames and earnings forecast errors is more likely to be observed for African-American analysts and analysts whose ancestry countries are geographically apart from the USA. In contrast, this study finds that when analysts’ foreign countries of ancestry are aligned with that of the CEOs, analysts exhibit lower earnings forecast errors relative to analysts with common American surnames. More importantly, the results show that firms followed by more analysts with foreign surnames tend to exhibit higher earnings forecast errors.

Taken together, findings of this study are consistent with the conjecture that geographical, social and ethnical proximity between managers and analysts affect firms’ information environment. Therefore, this study contributes to the determinants of analysts’ earnings forecast errors and adds to the literature on firms’ information environment.

The purpose of this study is to investigate whether audit quality is associated with the speed with which managers revise earnings forecasts to arrive at the actual earnings through the lens of the auditor selection theory. This study examines this relationship in a unique institutional setting, Japan, where nearly all managers disclose earnings forecasts.

The authors pioneer an empirical proxy to capture the speed of management forecast revisions based on well-established principles from the finance and disclosure literatures. This proxy is tested alongside other disclosure proxies (namely, accuracy, frequency and timeliness) to assess the influence of audit quality on managerial forecasting behavior.

This empirical analysis shows that forecast revision speed is higher for firms that select higher-quality auditors. While firms that select higher-quality auditors revise forecasts in a more timely fashion, these firms revise less frequently. Moreover, the authors find that the influence of audit quality on forecast revisions is asymmetric. Specifically, the analysis of downward forecast revisions shows that higher-quality auditors are associated with firms that disclose bad news via forecasts revisions faster, more frequently and in a more timely fashion. However, the analysis of upward forecast revisions shows that higher-quality auditors have no effect on the speed with which firms disclose good news via forecast revisions, even though they are associated with less frequent but more timely forecast revisions. These findings have important implications for prior studies that consistently document an asymmetric response of the stock market to good news and bad news.

The authors provide evidence on the relationship between audit quality and management earnings forecasts using a novel and intuitive measure that captures forecast revision speed. This measure speaks to the growing interest in understanding the notion of speed and timing of voluntary disclosures. This study provides a more robust and comprehensive measure of the speed with which managers revise their earnings forecasts to arrive at the actual earnings. Furthermore, this study is among the first to document an asymmetric effect of audit quality on the type of news disclosed in forecast revisions.

The present study reviews the literature on the history and evolution of investment strategies in the stock market for the period from 1900 to 2022. Conflicts and relationships arising from such diverse seminal studies have been identified to address the research gaps.

The studies for this review were identified and screened from electronic databases to compile a comprehensive list of 200 relevant studies for inclusion in this review and summarized for the cognizance of researchers.

The study finds a coherence to complex theoretical documentation of more than a century of evolution on investment strategy in stock markets, capturing the characteristics of time with a chronological study of events.

There were complications in locating unpublished studies leading to biases like publication bias, the reluctance of editors to publish studies, which do not reveal statistically significant differences, and English language bias.

Practitioners can refine investment strategies by incorporating behavioral finance insights and recognizing the influence of psychological biases. Strategies span value, growth, contrarian, or momentum indicators. Mitigating overconfidence bias supports effective risk management. Social media sentiment analysis facilitates real-time decision-making. Adapting to evolving market liquidity curbs volatility risks. Identifying biases guides investor education initiatives.

This paper is an original attempt to pictorially depict the seminal works in stock market investment strategies of more than a hundred years.

Given the limited studies that have started to focus on contexts where integrated reporting (IR) is voluntarily adopted, this paper aims to explore the moderating role of institutional characteristics on the association between voluntary report release and analyst forecast accuracy.

This study uses a quantitative empirical research method grounded on voluntary disclosure theory to provide empirical evidence on an international sample of companies choosing to release integrated reports. Preliminarily, a cluster analysis is used to group countries according to institutional patterns. Multivariate analyses detect the associations between report release choice and analysts’ forecast accuracy across clusters. Multiple econometric approaches are used to address the endogeneity concerns.

IR release is not informative for the market unless considering systematic variations across different institutional settings. Analysts’ forecast is more accurate for IR adopters located in strong institutional enforcement settings than for all the other companies. In the strong institutional setting that is also characterized by a pluralistic society, IR release benefits for the market are conditioned by the fact that the choice to release IR depends on environmental, governance and social disclosure-based managers remuneration and disclosure requirements. In weak institutional settings, IR release is not beneficial for the forecast accuracy.

Academics and practitioners can gain understanding of the usefulness of voluntary IR across different institutional settings.

The study advances the understanding of the IR’s informativeness, overcoming the common dichotomous distinctions between strong and weak institutional settings.

We study the role of having an audit committee (AC) as a signal of firm quality and as a monitoring device of the information quality contained in the listing prospectus.

Ordinary Least Squares regressions are used to examine the association between the presence of an audit committee and (1) the initial return (IR), and (2) the earnings forecast error in the listing prospectus in a sample of 55 Real Estate Investment Trusts that went public on the BME Growth market during 2013–2022. Heckman two-step estimation procedure to correct for endogeneity and bootstrap are used for robustness.

We show that IR and earnings forecasts are significantly affected by the presence of AC. The IR is higher and the earnings forecast included in the prospectus are of higher quality in firms with AC.

Our research provides (1) managers with new tools when deciding on their corporate governance structure in the listing process, (2) specific evidence for regulators on the role played by ACs in the process of going public, which may be useful in the context of the ongoing regulatory changes regarding admission processes in Europe, and (3) society with a sign that AC can enhance investor and public confidence in financial markets and foster a more stable and transparent investment environment.

The adoption of an AC is voluntary in this market, so this discretionary decision provides an exceptional opportunity to conduct such an analysis. Additionally, this issue has not been previously analysed in Europe.

我們擬探討審計委員會在作為是公司質素的一個信號, 以及在作為是監控上市招股書內資料質素的一個機制所扮演的角色。

研究人員使用普通最小二乘法回歸模型, 去探討審計委員會的存在與 (一) 初期回報、和 (二)上市招股書內收益預測的錯誤兩者之間的關聯。研究的樣本為55個於2013年 至 2022年間在 BME Growth 市場上市的不動產投資信託。研究人員使用自助法和可幫助修正內生性問題的赫克曼兩階段回歸, 以達數據的穩健性。

研究結果顯示, 審計委員會的存在會顯著地影響初期回報和收益預測。若公司採用審計委員會, 初期回報則會較高; 而且, 招股書內的收益預測也顯示較高的質素。

由於採用審計委員會與否在這研究的有關市場內純基於自主的決定、而非屬強制性, 因此, 與這決定有關的課題為學者提供了特殊的研究機會。再者, 在歐洲至今似仍未有學者曾嘗試探討這個課題。

本研究帶來以下實務方面的啟示: (一) 當經理需決定其在上市過程中的公司治理結構時, 本研究為他們提供了新的工具給他們使用; (二) 本研究為調控者就公司上市過程中審計委員會所扮演的角色提供具體的證據。而這因歐洲正進行更改與批核上市有關的規管而可能使其產生用處; (三) 本研究為社會提供一個信號, 顯示審計委員會不但可增強投資者和大眾對金融市場的信心, 而且還能培育更穩定和透明的投資環境。

公司治理、審計委員會、上市、初期回報、盈餘預測、不動產

European countries are likely to increasingly adopt integrated reporting (IR) voluntarily, after the 2014/95/EU Directive is revised and other initiatives are implemented. Therefore, the present study provides insights on the relevance of IR in voluntary contexts by exploring analysts' reactions to the release of integrated reports in diverse institutional settings.

Drawing on voluntary disclosure theory, a quantitative empirical research method is used to explore the moderating role of country-level institutional characteristics on the associations between voluntary IR release and analyst forecast accuracy and dispersion.

IR informativeness is not uniform in the voluntary context and institutional settings play a moderating role. IR release is associated with increased consensus among analyst forecasts. However, in countries with weak institutional enforcement, a reverse association is detected, indicating that analysts rely largely on IR where the institutional setting strongly protects investors. Although a strong institutional setting boosts the IR release usefulness in terms of accuracy, it creates noise in analyst consensus.

Academics can appreciate the usefulness of voluntary IR across the institutional enforcement contexts.

Managers can use these findings to understand opportunities offered by IR voluntary release. The study recommends that policymakers, standard setters and regulators strengthen the institutional enforcement of sustainability disclosure.

This study is a unique contribution to recent calls for research on the effects of nonfinancial disclosure regulation and on IR “impacts”. It shows on the international scale that IR usefulness for analysts is moderated by institutional patterns, not country-level institutional characteristics.

Using a sample of 9,898 firm-year observations from 1,821 unique Chinese listed firms over the period from 2004 to 2019, this study aims to investigate whether the market rewards meeting or beating analyst earnings expectations (MBE).

The authors use an event study methodology to capture market reactions to MBE.

The authors document a stock return premium for beating analyst forecasts by a wide margin. However, there is no stock return premium for firms that meet or just beat analyst forecasts, suggesting that the market is skeptical of earnings management by these firms. This market underreaction is more pronounced for firms with weak external monitoring. Further analysis shows that meeting or just beating analyst forecasts is indicative of superior future financial performance. The authors do not find firms using earnings management to meet or just beat analyst forecasts.

The authors provide evidence of market underreaction to meeting or just beating analyst forecasts, with the market's over-skepticism of earnings management being a plausible mechanism for this phenomenon.

The findings of this study are informative to researchers, market participants and regulators concerned about the impact of analysts and earnings management and interested in detecting and constraining managers' earnings management.

The authors provide new insights into how the market reacts to MBE by showing that the market appears to focus on using meeting or just beating analyst forecasts as an indicator of earnings management, while it does not detect managed MBE. Meeting or just beating analyst forecasts is commonly used as a proxy for earnings management in the literature. However, the findings suggest that it is a noisy proxy for earnings management.

The main purpose of this study is to examine the disclosure of earnings forecasts in firms' prospectuses to explain investor demands or, in other words, oversubscription rates of Malaysian initial public offerings (IPOs).

Ordinary least squares and robust methods were used to examine cross-sectional data comprising 466 fixed-price IPOs reported for the period from January 2000 to February 2020 on Bursa Malaysia.

The results showed that IPOs with earnings forecasts obtained higher oversubscription rates than those without earnings forecasts. IPOs with earnings forecasts provide value-relevant signals to prospective investors about the good prospects of firms, resulting in an increase in the demand for IPO shares. For the IPO samples listed during the global financial crisis (GFC) period, IPOs with earnings forecasts had negative impacts on the oversubscription rates. These results were robust to quantile methods and the two-stage least squares method.

The research findings provide fresh information for investors regarding the importance of earnings forecasts as a trustworthy signal of a firm’s quality when making share subscription decisions.

The regulator is advised to encourage issuers to include earnings forecasts in their prospectuses since such forecasts help to increase the demand for IPOs.

This study contributes to the literature by offering empirical evidence regarding the signalling impact of earnings forecast disclosures on investor demands for Malaysian IPOs. Moreover, this study provides evidence demonstrating the impact of earnings forecast disclosures on oversubscription rates of Malaysian IPOs during the GFC period.

The authors examine the role of analysts’ prior experience of forecasting for firms exposed to epidemics on analysts’ forecast accuracy during the COVID-19 pandemic.

The authors examine the impact of analysts’ prior epidemic experience on forecast accuracy by comparing the changes from the pre-COVID-19 period (calendar year 2019) to the post-COVID period extending up to March 2023 across HRE versus non-HRE analysts. The authors consider a full sample (194,980) and a sub-sample (136,836) approach to distinguish “Recent” forecasts from “All” forecasts (including revisions).

The study's findings reveal that forecast accuracy for HRE analysts is significantly higher than that for non-HRE analysts during COVID-19. Specifically, forecast errors significantly decrease by 0.6% and 0.15% for the “Recent” and “All” forecast samples, respectively. This finding suggests that analysts’ prior epidemic experience leads to an enhanced ability to assess the uncertainty around the epidemic, thereby translating to higher forecast accuracy.

The finding that the expertise developed through an experience of following high-risk firms in the past enhances analysts’ performance during the pandemic sheds light on a key differentiator that partially explains the systematic difference in performance across analysts. The authors also show that industry experience alone is not useful in improving forecast accuracy during a pandemic – prior experience of tracking firms during epidemics adds incremental accuracy to analysts’ forecasts during pandemics such as COVID-19.

The study findings should prompt macroeconomic policymakers at the national level, such as the central banks of countries, to include past epidemic experiences as a key determinant when forecasting the economic outlook and making policy-related decisions. Moreover, practitioners and advisory firms can improve the earning prediction models by placing more weight on pandemic-adjusted forecasts made by analysts with past epidemic experience.

The uncertainty induced by the COVID-19 pandemic increases uncertainty in global financial markets. Under such circumstances, the importance of analysts’ role as information intermediaries gains even more importance. This raises the question of what determines analysts’ forecast accuracy during the COVID-19 pandemic. Building upon prior literature on the role of analyst experience in shaping analysts’ forecasts, the authors examine whether experience in tracking firms exposed to prior epidemics allows analysts to forecast more accurately during COVID-19. The authors find that analysts who have experience in forecasting for firms with high exposure to epidemics (H1N1, Zika, Ebola, and SARS) exhibit higher accuracy than analysts who lack such experience. Further, this effect of experience on forecast accuracy is more pronounced while forecasting for firms with higher exposure to the risk of COVID-19 and for firms with a poor ex-ante informational environment.