Empirical Study On Analysts’ Personal Characteristics And Forecast Accuracy

This paper aims at exploring the mediating effect of forecast boldness, and finding out whether it will effect the relationship between analyst characteristics and forecast accuracy or not.The contents are arranged as follows:The first chapter is the preface. This paper introduce background of the research, quiz four questions, then point out significance and contents.The second chapter is the correlation theory and concept definition. This chapter firstly introduces correlation theory, then explains the concept of analysts and earning forecast, defining measure for analyst forecast boldness and accuracy.The third chapter is the literature review. Reading a large number of domestic and foreign literature, then summarize them and determine the basic direction.The fourth chapter is the research design. Finding analyst forecast data which from2009to2011in CSMAR database, use it as the research object. According to certain principle, I collect the sample data and ultimately determine the data type is independently pooled cross section data.The fifth chapter is the empirical test. Firstly, using STATA software to do descriptive statistics and correlation matrix of the10721sample data; Secondly, OLS regression of analyst personal characteristics and forecast accuracy, two and multinomial Logit regression of analyst personal characteristics and forecast boldness, OLS regression of forecast boldness and accuracy, the mediating effect of forecast boldness between analyst personal characteristics and forecast accuracy; Finally, finish the robustness test by redefining the sample range of linear regression and replacing the Logit model with Probit model.The sixth chapter is the main conclusions and enlightenment. Firstly, summary the full research contents and make conclusions:Secondly, point out the innovations, limitations and shortcomings; Finally, put forward relevant proposals from companies and analysts angle.In this paper, I draw the following conclusions through empirical analysis:1、Analysts’ personal characteristics are important antecedents of forecast accuracy. After controlling other factors, such as institutional investors, annual rate of return, price-to-book ratio, tracking number, numbers, I find that male analyst, highly educated analysts, rich experienced analysts, their forecast accuracy are higher.2、Analysts’ personal characteristics have a significant effect on forecast boldness. Based on the validated hypothesis, I further find male analyst, highly educated analysts, rich experienced analysts all have the following conclusion: Compared with conservative forecast, more inclined to put forward bold forecast; Prefer to propose bold optimistic forecast rather than bold pessimistic forecast; Compared with conservative forecast, more inclined to put forward bold optimistic forecast; No obvious difference between conservative forecast and bold pessimistic forecast behavior. It is obvious that some personal characteristics of analysts will affect their forecast behavior.3、Forecast boldness and accuracy have significantly positive effect. Bold forecast are more accurate than conservative forecast, the result is consistent with Clement and Tse’s (2005). Analysts who put forward bold forecast have stronger ability, they not only have more private information but also make better use of the information, so their forecasts are consistent with the actual situation of the market and the company.4、Forecast boldness plays an intermediary role between analysts’ personal characteristics and forecast accuracy. On one hand, analysts’ personal characteristics can directly effect forecast accuracy; on the other hand, it can effect forecast accuracy through forecast behavior. Forecast boldness as part intermediary variables, affect gender and forecast accuracy, educational level and forecast accuracy, experience and forecast accuracy.Main contributions: 1、Research perspective. Past research treat analysts’ personal characteristics, forecast boldness and accuracy as separate part rather than one. In this paper, I start from the intermediary effect angle and find out forecast boldness really effect the relationship between analysts’ characteristics and forecast accuracy. I provide a new perspective for future research.2、Research content aspect. Analysts’personal characteristics and forecast boldness, existing research compared men and women analysts’ differences in forecast behavior.In this paper, I did paired comparison of the bold forecast, conservative forecast, bold pessimistic forecast and bold optimistic forecast. I find that male analyst, highly educated analysts, rich experienced analysts all have the following conclusion:Compared with conservative forecast, they are more inclined to put forward bold forecast; They refer to propose bold optimistic forecast rather than bold pessimistic forecast; Compared with conservative forecast, they are willing to put forward bold optimistic forecast; No obvious difference between conservative forecast and bold pessimistic forecast behavior.