The Effect of Corporate Governance on Analysts’ Earnings Forecast Errors

• Main Authors: Yi-Fen Su, 蘇怡芬
• Other Authors: Chun-An Lee
• Format: Others
• Language: zh-TW
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/34193278145036569451

碩士 === 國立雲林科技大學 === 財務金融系碩士班 === 95 === The earnings forecast values and stock recommendations declared by analysts put a great impact on the investing strategies. Information transparency of companies plays a significant role on whether analysts predict earnings accurately. The study investigates what kind of factors lead to earnings forecast errors made by analysts and the association between information transparency and average monthly stock turnover rate held by foreign investors from the angle of corporate governance. According to the result, when sample includes all Taiwan’s listed firms during 1996- 2006, only four variables, including board size, voting rights possessed by the largest ultimate owners of the firm, the ratio of cash flow rights and voting rights of largest ultimate owners of the firm, and the stock percentage held by domestic institutional investors, have association with analysts’ forecast errors. In addition, when sample period is 2005, only the percentage of independent supervisors have association with analysts’ forecast errors；when sample period is 2006, only the stock percentage held by domestic institutional investors have association with analysts’ forecast errors. Finally, the relationship between information transparency and analysts’ forecast errors from 2003-2006 cannot be separately proved. But stock turnover rate held by foreign investors is lower for the firms which have the best information transparency.