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How Country-Level Corporate Governance Impacts Information Environment: Using a New Model with More Forecast Properties
Linnaeus University, School of Business and Economics, Department of Management Accounting and Logistics.
Linnaeus University, School of Business and Economics, Department of Management Accounting and Logistics.ORCID iD: 0000-0002-1626-8410
Linnaeus University, School of Business and Economics, Department of Management Accounting and Logistics.
2015 (English)In: International Journal of Business and Social Science, ISSN 2219-1933, E-ISSN 2219-6021, Vol. 6, no 8, 14-26 p.Article in journal (Refereed) Published
Abstract [en]

Financial analyst forecast properties are often used to measure the information environment (IE) within which firms operate. The three most common analyst proxies for IE are analyst following, analyst forecast accuracy, and analyst forecast dispersion. Research using these forecast properties indicates that country-level corporate governance (CCG) positively affects IE. However, consider that analyst properties are determined by both public and private information and that these proxies do not enable determining these two dimensions; even so, they can be interpreted as a rough proxy for IE, in particular because there are models that measure the proportion and precision of private information, the precision of public information and the precision of total information using analyst data. We claim that it is especially important to understand these dimensions and that the relationship between CCG and IE has not been fully investigated. The aim of this paper is therefore to investigate this relationship more thoroughly using a new model as a proxy for firms’ IE. We use a worldwide sample, and our results show that higher levels of CCG significantly and positively affect IE. Greater CCG improves the precision of both public and total information. Additionally, our results indicate that precision in private information is unaffected by greater CCG and that analysts use relatively less private information in their forecasts with increased CCG. We can therefore conclude a generally positive relationship between CCG and IE with improved public information. 

Place, publisher, year, edition, pages
Center for Promoting Ideas , 2015. Vol. 6, no 8, 14-26 p.
Keyword [en]
information environment, analyst forecasts, comparative study
National Category
Business Administration
Research subject
Economy, Business administration
Identifiers
URN: urn:nbn:se:lnu:diva-47316OAI: oai:DiVA.org:lnu-47316DiVA: diva2:871827
Available from: 2015-11-17 Created: 2015-11-17 Last updated: 2017-02-17Bibliographically approved

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von Koch, ChristopherNilsson, OlaJönsson, Micael
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CiteExportLink to record
Permanent link

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Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf