| Popis: |
With three essays, this dissertation relates analyst activity and firm-specific corporate governance across the globe. In particular, I focus on four measures of analyst activity: the accuracy of earnings forecasts, the dispersion of earnings forecasts, the number of analysts following the company, and analyst recommendations. In the first essay, the first two hypotheses predict that disclosures of governance practices are positively (negatively) associated with forecast accuracy (forecast dispersion). The third hypothesis examines the association between analyst following and governance disclosures. In support of my first two hypotheses, I find that better governance disclosure is associated with more accurate forecasts and smaller dispersion in earnings forecasts. These findings indicate that analysts understand the implications of corporate governance for future cash flows and incorporate them in earnings forecasts. In addition, I document a positive association between analyst following and the quantity of governance disclosures. The second essay includes two research hypotheses examined in emerging security markets. First, I predict a positive association between analyst following and the strength of overall corporate governance. Second, I anticipate that analysts will issue more favorable recommendations for better-governed companies. Using corporate governance rankings published by Credit Lyonnais Securities Asia in 2001 and 2002 as a measure of the strength of internal corporate governance, I present empirical support for both hypotheses. The third essay examines the joint impact of analyst following and the quality of corporate governance on the value of the firm in emerging markets. I do not find evidence that supports my first hypothesis that the positive relation between disclosure and valuation is conditional on the level of analyst following. The results support my second hypothesis that the positive relation between corporate governance and valuation is weaker for companies with greater analyst following only in common-law countries within the emerging markets. |
