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Analyst Forecast Accuracy and Media Independence
Author(s) -
Kim JeongBon,
Li Liuchuang,
Zhang Hao
Publication year - 2017
Publication title -
financial management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.647
H-Index - 68
eISSN - 1755-053X
pISSN - 0046-3892
DOI - 10.1111/fima.12175
Subject(s) - independence (probability theory) , sample (material) , quality (philosophy) , business , econometrics , economics , accounting , statistics , mathematics , philosophy , chemistry , epistemology , chromatography
Using a large international sample of 47,307 firm‐years from 52 countries, we investigate the impact of media independence on the forecast quality of financial analysts. We find that analyst forecast errors are positively associated with the extent of a country's state media ownership and its lack of freedom of the press. We also find that financial analysts with more inaccurate forecasts disappear from the institutional broker's estimate system more quickly in countries with more independent media.