What is it about?
This paper shows that analysts' forecasts increase accuracy when they cover firms with better corporate governance arrangements and higher product market competition. Both mechanisms (internal: corporate governance) and external (competition) work as a control to improve firms' information environment, then they help analysts since firms increase information disclosed to the market with better quality.
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Why is it important?
The paper helps investors and analysts to improve their analyses when evaluate a company. Also the finding that strong internal and external governance it's important to understand firms' behavior.
Perspectives
The paper was developed based on the two Dissertations of the authors. The findings help investors and analysts to use a comprehensive view of business by taking into account competition and governance. As a consequence they will find a better information environment.
Jose Elias Almeida
Universidade Federal do Espirito Santo
Read the Original
This page is a summary of: The Effects of Corporate Governance and Product Market Competition on Analysts' Forecasts: Evidence from the Brazilian Capital Market, The International Journal of Accounting, September 2015, Elsevier,
DOI: 10.1016/j.intacc.2015.07.007.
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