Internationalization and the reliance of analyst forecasts in stakeholder-oriented corporate governance: Evidence from Japanese MNEs

This paper investigates whether disclosure quality of analyst forecasts on management forecasts is measured as reliance of analyst forecasts on management forecasts and dispersion of analyst forecasts is affected by the internationalization under a unique setting of effectively mandated management forecasts in Japan. We find that higher internationalization would result in lower disclosure quality of analyst forecasts on management forecasts in Japanese corporations. This implies that firms with higher internationalization face the complexity and uncertainties. Second, greater foreign shareholdings enhance the disclosure quality of analyst forecasts on management forecasts, suggesting the effectiveness of foreign shareholders' disclosure pressure. Finally, greater bank ownership would also enhance the credibility of analyst forecasts on management forecasts under stakeholder-oriented corporate governance.