Abstract

http://ssrn.com/abstract=1276761
 
 

References (52)



 
 

Citations (1)



 


 



The Frequency of Financial Analysts' Forecast Revisions: Theory and Evidence About Determinants of Demand for Predisclosure Information


Craig W. Holden


Indiana University - Kelley School of Business - Department of Finance

Pamela S. Stuerke


University of Missouri at Saint Louis

2008-04

Journal of Business Finance & Accounting, Vol. 35, Issue 7-8, pp. 860-888, September/October 2008

Abstract:     
A fundamental property of a financial market is its degree of price informativeness. A major determinant of price informativeness is predisclosure information collected by financial analysts and then privately disseminated to clients, who make the recommended trades. We develop a dynamic model of the analyst's optimal strategy of forecast revision frequency with endogenous analysts and endogenous traders. We then empirically test the model's predictions. We find that forecast revision frequency is positively associated with earnings variability, trading volume, and earnings response coefficients, and negatively associated with skewness of trading volume. Thus, we find strong empirical support for our dynamic model.

Number of Pages in PDF File: 29

Accepted Paper Series





Date posted: October 2, 2008  

Suggested Citation

Holden, Craig W. and Stuerke, Pamela S., The Frequency of Financial Analysts' Forecast Revisions: Theory and Evidence About Determinants of Demand for Predisclosure Information (2008-04). Journal of Business Finance & Accounting, Vol. 35, Issue 7-8, pp. 860-888, September/October 2008. Available at SSRN: http://ssrn.com/abstract=1276761 or http://dx.doi.org/10.1111/j.1468-5957.2008.02108.x

Contact Information

Craig W. Holden (Contact Author)
Indiana University - Kelley School of Business - Department of Finance ( email )
Kelley School of Business
1309 E. 10th St.
Bloomington, IN 47405
United States
812-855-3383 (Phone)
812-855-5875 (Fax)
HOME PAGE: http://www.kelley.iu.edu/cholden

Pamela S. Stuerke
University of Missouri at Saint Louis ( email )
8001 Natural Bridge Road
St. Louis, MO 63121
United States
314 516-6132 (Phone)
314 516-6420 (Fax)
Feedback to SSRN


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