Premium
Measuring the Impact of Corporate Investment Announcements on Share Prices: The Spanish Experience
Author(s) -
Del Brio Esther B.,
Perote Javier,
Pindado Julio
Publication year - 2003
Publication title -
journal of business finance and accounting
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.282
H-Index - 77
eISSN - 1468-5957
pISSN - 0306-686X
DOI - 10.1111/1468-5957.05254
Subject(s) - earnings , economics , investment (military) , empirical evidence , investment decisions , financial crisis , monetary economics , quality (philosophy) , earnings per share , financial economics , business , accounting , finance , macroeconomics , behavioral economics , political science , philosophy , epistemology , law , politics
We bring together three disparate strands of literature to develop a comprehensive empirical framework to examine the efficiency of security analysts' earnings forecasts in Singapore. We focus specifically on how the increased uncertainty and the negative market sentiment during the period of the Asian crisis affected the quality of earnings forecasts. While we find no evidence of inefficiencies in the pre‐crisis period, our results suggest that after the onset of the crisis, analysts (1) issued forecasts that were systematically upward biased; (2) did not fully incorporate the (negative) earnings‐related news; and (3) predicted earnings changes which proved too extreme.