The Influence of Culture and Corporate Governance on the Characteristics that Distinguish Superior Analysts
Posted: 27 Oct 2003
This paper presents evidence for international markets about the characteristics of financial analysts who are able to provide more accurate earnings forecasts than their peers. The evidence is provided for ten individual countries and for country groups formed on the basis of a similar culture and corporate governance. While prior studies document that forecast accuracy in the U.S. is associated with several analyst characteristics, this topic has not been investigated in an international setting. We predict that differences in culture and corporate governance will cause the influence of some of the characteristics to differ by country. We find that relative forecast accuracy is influenced by years of experience, size of the analyst's employer, and frequency of forecast issuance in many of the countries and show that the significance of experience and employer is conditional on the type of culture and corporate governance of the country.
JEL Classification: M41, M47, G29, G34
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