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Do financial analysts facilitate investors’ assessment of earnings?: Evidence from the Korean stock market

Title
Do financial analysts facilitate investors’ assessment of earnings?: Evidence from the Korean stock market
Author
최성진
Keywords
Financial Analysts; Value Relevance; Earnings Response Coefficients
Issue Date
2016-09
Publisher
Western Academic Publishers
Citation
Journal of Applied Business Research, v. 32, NO. 5, Page. 1465-1474
Abstract
This paper seeks to enhance our understanding of financial analysts in assisting market investors’ use of accounting earnings in the Korean stock market. We examine whether stock returns differentially reflect earnings information for firms with analyst coverage. We propose that the role of analysts as external monitors as well as information intermediaries enhances the market investors’ valuation of earnings. We find that market valuation of earnings is higher for firms with analyst following. Furthermore, market investors’ valuation of earnings increases (or decreases) with the number of analysts (or with the dispersion of analysts’ forecasts). This suggests that the beneficial effect of analysts arises through the quantity and quality of analysts’ information. This study contributes to the literature by investigating the important role of analysts in emerging market.
URI
https://clutejournals.com/index.php/JABR/article/view/9773https://repository.hanyang.ac.kr/handle/20.500.11754/76707
ISSN
0892-7626
DOI
10.19030/jabr.v32i5.9773
Appears in Collections:
GRADUATE SCHOOL OF BUSINESS[S](경영전문대학원) > BUSINESS ADMINISTRATION(경영학과) > Articles
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