Analysts’characteristics and neglected firms

• Main Authors: Ming-Hung Chung, 鍾岷宏
• Other Authors: 陳慧玲
• Format: Others
• Language: en_US
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/98395944672090522818

碩士 === 國立中央大學 === 財務金融研究所 === 95 === This study examines whether the analysts’ coverage decisions are associated with their ability and experience. We also investigate whether the forecast errors and forecast horizon are related to analysts’ ability, industry experiences or firm experiences. The empirical results show that analyst coverage decisions for neglected firms are significantly positively related to their ability and industry experience. In contrast, analyst coverage decisions for most covered firms are insignificantly positively associated with their ability. We also find that high ability and more experienced analysts following a neglected firm can provide more accurate forecasts than analysts with low ability and less experience. This study also demonstrates that high ability and more experienced analysts prefer to issue longer-term earnings forecasts. This study also examines whether the market’s response to revisions made by high ability and more industry-experience analysts who follow neglected firms will be larger. We find that the impacts on stock prices are significantly positively related to forecast revisions provided by high ability and more experienced analysts.