【Topic】
Analyst Visibility and Earnings Forecasts Quality
【Abstract】
In this study, we investigate the impact of reduced visibility on the quality of financial analysts’ earnings forecasts by leveraging a unique setting where Thomson Reuters introduced an anonymization policy on its Eikon platform for earnings forecasts from 88 brokerage houses. Using a difference-in-differences design, we document a significant increase in forecast accuracy for anonymized forecasts. We also find that analysts with anonymized forecasts broaden their forecast range and issue bolder stock recommendations and target prices. Consistent with the visibility-enhancing hypothesis, these findings improve our understanding of how visibility, or lack thereof, shapes market participants’ behaviors.
【Speaker】
Qiang CHENG
(Dean and Lee Kong Chian Chair Professor of Accounting at School of Accountancy at the Singapore Management University)
Dr. Cheng graduated from Tsinghua University, Beijing and received his PhD in the University of Wisconsin-Madison, US in 2002. He has previously taught at the University of Wisconsin-Madison, the University of British Columbia, and the University of Washington.
An award-winning researcher and teacher, Dr. Cheng has published over thirty articles in leading scholarly accounting and finance journals, including The Accounting Review, Journal of Accounting Research, Journal of Accounting and Economics, and Journal of Financial Economics. He conducts research on various financial reporting and disclosure issues, including how corporate governance and family ownership affect corporate decisions, how investors use accounting information for valuation purposes, how executives affect financial reporting and disclosure decisions for their self-interests, and how security analysts help disseminate information in the capital markets. His current research focuses on the impact of digitalization on corporate decisions and ESG-related disclosure issues.
Dr. Cheng previously served as an editor of The Accounting Review and a Council Member of the Institute of Singapore Chartered Accountants (ISCA). He currently serves on the Research Committee of the American Accounting Association (AAA). He served as the president of the Chinese Accounting Professors' Association of North America from 2009 to 2010.
