Investor protection and analysts' cash flow forecasts around the world

• 成果类型: Article; Proceedings Paper
• 署名作者: DeFond, Mark L.; Hung, Mingyi
• 署名单位: University of Southern California
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-007-9030-7
• 发表日期: 2007
• 页码: 377-419
• 关键词: value relevance; INFORMATION; STANDARDS; BIAS

摘要

We find that analysts are more likely to provide cash flow forecasts in countries with weak investor protection. This finding is consistent with our hypothesis that market participants demand (and analysts supply) cash flow information when weak investor protection results in earnings that are less likely to reflect underlying economic performance. Our results suggest that information intermediaries respond to market-based incentives to attenuate the adverse effects of country-level institutional factors on earnings' usefulness. These findings contribute to the literature by shedding light on the institutional determinants of analysts' research activities, and on the nature of the financial information they generate.