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Determinants of sell‐side financial analysts’ use of non‐financial information

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  • Raf Orens
  • Nadine Lybaert

Abstract

This paper aims to research the context within which sell‐side financial analysts make decisions to use corporate non‐financial information. Prior research has demonstrated that financial analysts take into account non‐financial information in their analyses of firms, but knowledge is scarce about what determines their use of this information. Based on a survey conducted among Belgian financial analysts, we observe a significant negative association between the financial analysts’ use of non‐financial information and the earnings informativeness of a firm's financial statement information proxied by leverage and stock return volatility. We also find that a higher amount of non‐financial information is used by less experienced financial analysts and by financial analysts covering a higher number of firms.

Suggested Citation

  • Raf Orens & Nadine Lybaert, 2010. "Determinants of sell‐side financial analysts’ use of non‐financial information," Accounting and Business Research, Taylor & Francis Journals, vol. 40(1), pages 39-53.
    • Handle: RePEc:taf:acctbr:v:40:y:2010:i:1:p:39-53
    DOI: 10.1080/00014788.2010.9663383
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    Cited by:

    1. Jani Saastamoinen & Hannu Ojala & Kati Pajunen & Pontus Troberg, 2018. "Analyst Characteristics and the Level of Critical Perception of Goodwill Accounting," Australian Accounting Review, CPA Australia, vol. 28(4), pages 538-555, December.
    2. Osman Yukselturk & Jon Tucker, 2015. "The impact of analyst sentiment on UK stock recommendations and target prices," Accounting and Business Research, Taylor & Francis Journals, vol. 45(6-7), pages 869-904, December.
    3. Gerrit Sarens & Giuseppe D’Onza, 2017. "The perception of financial analysts on risk, risk management, and internal control disclosure: Evidence from Belgium and Italy," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 14(2), pages 118-138, May.
    4. Paula Monteiro, Albertina & Vale, Joana & Leite, Eduardo & Lis, Marcin & Kurowska-Pysz, Joanna, 2022. "The impact of information systems and non-financial information on company success," International Journal of Accounting Information Systems, Elsevier, vol. 45(C).
    5. Andersson, Patric & Hellman, Niclas, 2020. "Analysts’ evaluations of acquisitions: Swedish survey evidence on IFRS knowledge and the use of accounting information for valuation purposes," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 41(C).
    6. Wan Nordin Wan-Hussin & Ameen Qasem & Norhani Aripin & Mohd Shazwan Mohd Ariffin, 2021. "Corporate Responsibility Disclosure, Information Environment and Analysts’ Recommendations: Evidence from Malaysia," Sustainability, MDPI, vol. 13(6), pages 1-27, March.

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