Lost in Translation? Analysts’ Forecasts of Cross-Listed Firms

Journal of International Accounting Research 19, pp. 41-64, 2020

44 Pages Posted: 18 May 2020 Last revised: 2 Sep 2022

See all articles by Hyunkwon Cho

Hyunkwon Cho

Sungkyunkwan University

Volkan Muslu

C.T. Bauer College of Business University of Houston

Minjae Koo

The Chinese University of Hong Kong (CUHK) - CUHK Business School

Date Written: April 21, 2020

Abstract

The level of difficulty for U.S. analysts in the native language of a cross-listed firm increases their forecast errors. The association is decreased by analyst experience and analyst fluency in the language of the cross-listed firms. The association is also decreased for countries using IFRS and those with higher financial reporting quality. Investors react more strongly to forecasts for firms that present greater language difficulty to analysts. Overall, our findings suggest that the language difficulty of cross-listed firms is associated with poor information environment and capital-market-related costs.

Keywords: Analyst forecasts, forecast accuracy, language difficulty

JEL Classification: G14, G15, G17

Suggested Citation

Cho, Hyunkwon and Muslu, Volkan and Koo, Minjae, Lost in Translation? Analysts’ Forecasts of Cross-Listed Firms (April 21, 2020). Journal of International Accounting Research 19, pp. 41-64, 2020, Available at SSRN: https://ssrn.com/abstract=3581431

Hyunkwon Cho (Contact Author)

Sungkyunkwan University ( email )

53 Myeongnyun-dong 3-ga Jongno-ju
Guro-gu
Seoul, 110-745
Korea, Republic of (South Korea)

Volkan Muslu

C.T. Bauer College of Business University of Houston ( email )

4750 Calhoun Road
Houston, TX 77204
United States
713 7434924 (Phone)

Minjae Koo

The Chinese University of Hong Kong (CUHK) - CUHK Business School ( email )

Cheng Yu Tung Building
12 Chak Cheung Street
Shatin, N.T.
Hong Kong

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