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Group-Affiliated Analysts’ Strategic Forecasts During a Year: Evidence from Korea

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  • Byungjin Kwak
  • Kyoungwon Mo

Abstract

In examining the family-controlled business groups in Korea, prior literature shows that group-affiliated analysts’ forecasts are optimistically biased. This article investigates whether the group-affiliated analysts strategically time the level of accuracy and bias in their forecasts for the same group-affiliated firms due to the change in information asymmetry in the market. The results show that the group-affiliated analysts issue more accurate and less optimistic earnings forecasts for the affiliated firms when the level of information asymmetry is low; particularly, in April, which is right after annual earnings announcements.

Suggested Citation

  • Byungjin Kwak & Kyoungwon Mo, 2019. "Group-Affiliated Analysts’ Strategic Forecasts During a Year: Evidence from Korea," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 55(1), pages 59-77, January.
    • Handle: RePEc:mes:emfitr:v:55:y:2019:i:1:p:59-77
    DOI: 10.1080/1540496X.2018.1505611
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    Cited by:

    1. Chune Young Chung & Euisup Lee & Chang-Gyun Park, 2020. "Do Ownership Ties Increase the Optimistic Bias of Analysts’ Earnings Estimates? Evidence from Corporate Financing in the Korean Market," Sustainability, MDPI, vol. 12(11), pages 1-20, June.
    2. Kyoungwon Mo & Kyung Yun (Kailey) Lee, 2019. "Analyst Following, Group Affiliation, and Labor Investment Efficiency: Evidence from Korea," Sustainability, MDPI, vol. 11(11), pages 1-19, June.

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