IDEAS home Printed from https://ideas.repec.org/a/taf/rcjaxx/v9y2021i2p195-220.html
   My bibliography  Save this article

Can analysts see through goodwill bubbles? The impact of goodwill on analysts’ forecasts

Author

Listed:
  • Shuang Xue
  • Peiji Xu

Abstract

In recent years, the amount of goodwill has been increased dramatically and become one of the difficult problems in academic and accounting practice. This paper focuses on the impact of goodwill on analysts’ forecasts. It is found that goodwill can increase the optimism and decrease the accuracy of analysts’ forecasts because of its low quality. Goodwill recognised initially in bull market or from the M&A without founder-chairman or founder-CEO contains more bubbles and tends to be lower quality. The more the bubbles, the larger the optimism or the errors of analysts’ forecasts. In order to exclude the alternative explanations, we also, respectively, take cross-sectional tests to control the number of analysts, the number of star analysts, and whether there is M&A in year t, and then further examine the dynamic changes between goodwill and analysts’ forecasts.

Suggested Citation

  • Shuang Xue & Peiji Xu, 2021. "Can analysts see through goodwill bubbles? The impact of goodwill on analysts’ forecasts," China Journal of Accounting Studies, Taylor & Francis Journals, vol. 9(2), pages 195-220, April.
    • Handle: RePEc:taf:rcjaxx:v:9:y:2021:i:2:p:195-220
    DOI: 10.1080/21697213.2021.1980955
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/21697213.2021.1980955
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/21697213.2021.1980955?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:rcjaxx:v:9:y:2021:i:2:p:195-220. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rcja .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.