Diversification, Corporate Governance, and Firm’s Earnings Forecast Error
Date Issued
2015
Date
2015
Author(s)
Lai, Hsueh-Chin
Abstract
Recent evidence on the relationship between diversification and information asymmetry is mixed. Some studies document positive association, while others show insignificant results. Also, studies have demonstrated that worse information asymmetry results from poor governance. Empirically, diversification also results in poor corporate governance. By combining the above ideas and using analyst earnings forecast errors, I investigate how diversification and corporate governance would affect analyst earnings forecast error when taking them into consideration at the same time. I find that diversification is not a main driver of information asymmetry while corporate governance is. The empirical results also show that board holding and CEO duality has positive relationship with analyst earnings forecast error. Institutional shareholding is negatively associated with analyst earnings forecast error.
Subjects
Diversification
Corporate Governance
Analyst Earnings Forecast Errors
Information Asymmetry
Type
thesis
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ntu-104-R02723072-1.pdf
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