The Research On Star-analysts' Earnings Forecasts Accuracy And Behavior

with the rapid development of capital market in China,the scale of capital market is growing,and the number of the analyst also expand gradually.At the same time,star analysts contests,such as “New Fortune best analysts” increase security analysts' media coverage greatly and enhance security analysts' influence on the capital market.“New Fortune best analysts ”,as the most authoritative securities analyst rankings in China,has successful been hosted for thirteen years since 2003,and has been more and more influential.The title of “New Fortune best analysts” can bring security analysts not only great reputation but also the salary increase and the job promotion.The reputation brings analysts so much benefit,so many scholars and insiders begin to question the process the selection of star analysts and their ability.Based on this background,this paper focus on comparing earning forecast accuracy and predict behavior between star analysts and non-analysts.The paper compares the best analysts elected from the New Fortune with the analysts who did not appear on the list.Firstly,we use the Wilcoxon rank sum test and T-test methods to test if there are significant differences of earning forecast accuracy,optimism,herd behavior and so on between“star analyst''and“non-star”analyst.Secondly regression analysis is used in the paper to find the significant factors based on the characteristics of the companies.Then we use the OLS regression methodto test if there are significant differences of earning forecast accuracy between “star analyst''and“non-star”analyst.Then we use the same method to test if there are significant differences of earning forecast behaviorbetween “star analyst'' and “non-star” analyst.Finally the paper establishes a Logit model to test if analysts' earnings forecast accuracy will influence their probability of being elected the star-analyst.In this paper,we study the asset size of listed companies,ROE,the amount of earning forecast report,analyst coverageare related to analysts' earnings forecast.Besides,predicted frequencies and the timing of the report are also significant factors.As to the comparison between star analyst and non-star analyst in terms of the for earning forecast behavior,the empirical results show that non-star analysts forecast optimistically compared with star analysts.Besides there is herd behavior between “star analyst''and“non-star”analyst.Finally the paper establishes a Logistics model to find that analysts' earnings forecast accuracy will influence their probability of being elected the star-analyst.