Abstract

References (36)

Beta

Download | Share | Email | Add to Briefcase | Buy Hard Copy

The Inefficient Use of Macroeconomic Information in Analysts' Earnings Forecasts in Emerging Markets

Gerben J. De Zwart
ING Investment Management - Equity Investments

Dick J. C. Van Dijk
Erasmus University Rotterdam - Econometric Institute; Erasmus Research Institute of Management (ERIM) - Joint Research Institute of Rotterdam School of Management (RSM) and Erasmus School of Economics (ESE), EUR; Tinbergen Institute

March 2008, 03

ERIM Report Series Reference No. ERS-2008-007-F&A

Abstract:
This paper presents empirical evidence that security analysts do not efficiently use publicly available macroeconomic information in their earnings forecasts for emerging market stocks. Analysts completely ignore forecasts on political stability, while these provide valuable information for firm-level earnings growth. Analysts do incorporate output growth forecasts, but these actually bear no relevant information for firm-level earnings growth. Inflation forecasts are taken into account correctly. In addition, the information environment appears to be crucially important in emerging markets, as we find evidence that analysts handle macroeconomic information in a better way for more transparent firms.

Keywords: analysts' earnings forecasts, emerging markets, macroeconomic forecasts, forecast accuracy

JEL Classifications: G3, M, G24

Working Paper Series

Date posted: April 09, 2008 ; Last revised: October 29, 2009

Suggested Citation

De Zwart, Gerben J. and Van Dijk, Dick J. C., The Inefficient Use of Macroeconomic Information in Analysts' Earnings Forecasts in Emerging Markets (March 2008, 03). ERIM Report Series Reference No. ERS-2008-007-F&A. Available at SSRN: http://ssrn.com/abstract=1117784

Export to: Export Citation What's this?

Contact Information

Gerben J. De Zwart (Contact Author) ING Investment Management - Equity Investments ( email ) Prinses Beatrixlaan 15 The Hague 2595 AK Netherlands +31-(0)70-3791159 (Phone)
Dick J.C. Van Dijk Erasmus University Rotterdam - Econometric Institute ( email ) P.O. Box 1738 3000 DR Rotterdam Netherlands +31 10 408 1263 (Phone) +31 10 4089162 (Fax) HOME PAGE: http://people.few.eur.nl/djvandijk
Erasmus Research Institute of Management (ERIM) - Joint Research Institute of Rotterdam School of Management (RSM) and Erasmus School of Economics (ESE), EUR ( email ) P.O. Box 1738 3000 DR Rotterdam Netherlands
Tinbergen Institute ( email ) Burg. Oudlaan 50 Rotterdam 3062 PA Netherlands

Abstract

References (36)

Date posted: April 09, 2008 ; Last revised: October 29, 2009

Suggested Citation

Contact Information

Gerben J. De Zwart (Contact Author)

Dick J.C. Van Dijk