The Financial Analyst Forecasting Literature: A Taxonomy with Suggestions for Further Research

42 Pages Posted: 18 Feb 2008  

Sundaresh Ramnath

University of Miami - Department of Accounting

Steve Rock

University of Colorado at Boulder - Department of Accounting

Philip B. Shane

College of William & Mary

Abstract

This paper develops a taxonomy of research examining the role of financial analysts in capital markets. The paper builds on the perspectives provided by Schipper [Schipper, K. (1991). Analysts' forecasts. Accounting Horizons, 5, 105-131] and Brown [Brown, L. (1993). Earnings forecasting research: Its implications for capital markets research. International Journal of Forecasting, 9, 295-320]. We categorize papers published since 1992, describe the research questions addressed, and suggest avenues for further research in seven broad areas: (1) analysts' decision processes; (2) the nature of analyst expertise and the distributions of earnings forecasts; (3) the information content of analyst research; (4) analyst and market efficiency; (5) analysts' incentives and behavioral biases; (6) the effects of the institutional and regulatory environment (including cross-country comparisons); and (7) research design issues.

Keywords: Earnings forecasting, Financial analysts, Financial markets, Stock price forecasts, Analyst stock recommendations, Analyst research

JEL Classification: C53, E44, G12, G14, G24, G29, G32, G38, M41

Suggested Citation

Ramnath, Sundaresh and Rock, Steve and Shane, Philip B., The Financial Analyst Forecasting Literature: A Taxonomy with Suggestions for Further Research. International Journal of Forecasting, Vol. 24, No. 1, 2008. Available at SSRN: https://ssrn.com/abstract=1093405

Sundaresh Ramnath

University of Miami - Department of Accounting ( email )

Coral Gables, FL 33146-6531
United States
305-284-6668 (Phone)

Steven Karl Rock

University of Colorado at Boulder - Department of Accounting ( email )

419 UCB
Boulder, CO 80309-0419
United States
303-735-5009 (Phone)
303-492-5962 (Fax)

Philip B. Shane (Contact Author)

College of William & Mary ( email )

P.O. Box 8795
Williamsburg, VA 23185
United States

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