International Diversification and Analysts' Forecast Accuracy and Bias

Posted: 3 Dec 2001

See all articles by Augustine Duru

Augustine Duru

American University - Kogod School of Business

David M. Reeb

National University of Singapore

Abstract

We investigate the association between corporate international diversification and the accuracy and bias of consensus analysts' earnings forecasts. We find that greater corporate international diversification is associated with less accurate and more optimistic forecasts. Our results suggest that international diversification reflects unique dimensions of forecasting difficulty that are not captured in previously identified determinants. This evidence suggests that as firms become more geographically diversified, forecasting their earnings becomes more complex.

JEL Classification: G29, G31, M41, F23

Suggested Citation

Duru, Augustine and Reeb, David M., International Diversification and Analysts' Forecast Accuracy and Bias. Available at SSRN: https://ssrn.com/abstract=291220

Augustine Duru (Contact Author)

American University - Kogod School of Business ( email )

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David M. Reeb

National University of Singapore ( email )

Mochtar Riady Building
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Singapore, 119245
Singapore

HOME PAGE: http://www.davidreeb.net

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