The revision frequency of earnings forecasts and firm characteristics

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• 作者：Chia Ying Chan^a ; ¹ ; ^{sherrychan@saturn.yzu.edu.tw" class="auth_mail" title="E-mail the corresponding author} ; Huai-Chun Lo^b ; ^{hclo@saturn.yzu.edu.tw" class="auth_mail" title="E-mail the corresponding author} ; Ming Jing Yang^c ; ² ; ^{mjyang@fcu.edu.tw" class="auth_mail" title="E-mail the corresponding author}
• 关键词：Revision frequency ; Firm value ; Efforts of analysts
• 刊名：The North American Journal of Economics and Finance
• 出版年：2016
• 出版时间：January 2016
• 年：2016
• 卷：35
• 期：Complete
• 页码：116-132
• 全文大小：625 K

文摘

This study investigates how the revision frequency of earnings forecasts affects firm characteristics. Previous studies generally focus on the number of analysts following a firm to measure a firm's information environment. The frequency with which news is updated is often defined as an analyst's effort. Analysts provide more information to investors if they update news more frequently. This study examines whether the frequency of information updating for a particular firm affects the firm's performance. We apply three proxies for firm performance: stock liquidity, the cost of equity capital, and firm value. Our findings indicate that the analysts’ effort as measured by the frequency of news updating is effective in providing additional power beyond the number of analysts to represent the information environment of a firm. Therefore, this study suggests that combining both the number of analysts following a firm and the frequency of news updating can be a better proxy for assessing a firm's information environment.