{"title":"Does corporate internationalization affect analysts’ earnings forecast bias? Evidence from China","authors":"","doi":"10.1016/j.ribaf.2024.102505","DOIUrl":null,"url":null,"abstract":"<div><p>Using manually collected firm-level data on foreign subsidiaries, we examine the impact of internationalization on analysts’ earnings forecast bias in Chinese corporations. We find that analysts’ earnings forecast bias is stronger among multinational firms when compared with domestic firms, and the higher the level of internationalization, the greater the bias in analysts’ earnings forecasts. Various methods, such as the Heckman two-stage least squares, propensity score matching, and difference in difference tests, are employed to ensure the robustness of our results. The mechanism analysis indicates that oversea business complexity, information asymmetry and analysts’ experience are critical factors that moderate the relationship between international diversification and forecast bias. These findings have important implications for multinational corporations, analysts, and investors.</p></div>","PeriodicalId":51430,"journal":{"name":"Research in International Business and Finance","volume":null,"pages":null},"PeriodicalIF":6.3000,"publicationDate":"2024-08-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Research in International Business and Finance","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0275531924002988","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
Using manually collected firm-level data on foreign subsidiaries, we examine the impact of internationalization on analysts’ earnings forecast bias in Chinese corporations. We find that analysts’ earnings forecast bias is stronger among multinational firms when compared with domestic firms, and the higher the level of internationalization, the greater the bias in analysts’ earnings forecasts. Various methods, such as the Heckman two-stage least squares, propensity score matching, and difference in difference tests, are employed to ensure the robustness of our results. The mechanism analysis indicates that oversea business complexity, information asymmetry and analysts’ experience are critical factors that moderate the relationship between international diversification and forecast bias. These findings have important implications for multinational corporations, analysts, and investors.
期刊介绍:
Research in International Business and Finance (RIBAF) seeks to consolidate its position as a premier scholarly vehicle of academic finance. The Journal publishes high quality, insightful, well-written papers that explore current and new issues in international finance. Papers that foster dialogue, innovation, and intellectual risk-taking in financial studies; as well as shed light on the interaction between finance and broader societal concerns are particularly appreciated. The Journal welcomes submissions that seek to expand the boundaries of academic finance and otherwise challenge the discipline. Papers studying finance using a variety of methodologies; as well as interdisciplinary studies will be considered for publication. Papers that examine topical issues using extensive international data sets are welcome. Single-country studies can also be considered for publication provided that they develop novel methodological and theoretical approaches or fall within the Journal''s priority themes. It is especially important that single-country studies communicate to the reader why the particular chosen country is especially relevant to the issue being investigated. [...] The scope of topics that are most interesting to RIBAF readers include the following: -Financial markets and institutions -Financial practices and sustainability -The impact of national culture on finance -The impact of formal and informal institutions on finance -Privatizations, public financing, and nonprofit issues in finance -Interdisciplinary financial studies -Finance and international development -International financial crises and regulation -Financialization studies -International financial integration and architecture -Behavioral aspects in finance -Consumer finance -Methodologies and conceptualization issues related to finance