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The Association Between Web-Based Corporate Performance Disclosure and Financial Analyst Behaviour Under Different Governance Regimes

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Listed:
  • Walter Aerts
  • Denis Cormier

    (Concordia University's John Molson School of Business)

  • Michel Magnan

    (ESG UQAM)

Abstract

In this study, we assert and test that the determination of corporate performance communication and financial analysts' earnings forecasting work are closely intertwined processes. The resulting endogeneity in capital markets' information dissemination and use is strongly influenced by a country's governance regime. Results from simultaneous equation regressions show significant interrelationships between financial analysts' activities and corporate disclosure transparency for North American firms. Moreover, analyst following underlies corporate disclosure, which ultimately leads to a reduction in the dispersion of analysts' earnings forecasts. In contrast, capital markets' information dynamics for continental European firms are much weaker. Copyright (c) 2007 The Authors; Journal compilation (c) 2007 Blackwell Publishing Ltd.

Suggested Citation

  • Walter Aerts & Denis Cormier & Michel Magnan, 2007. "The Association Between Web-Based Corporate Performance Disclosure and Financial Analyst Behaviour Under Different Governance Regimes," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(6), pages 1301-1329, November.
  • Handle: RePEc:bla:corgov:v:15:y:2007:i:6:p:1301-1329
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    Cited by:

    1. Denis Cormier & Walter Aerts & Marie-Josée Ledoux & Michel Magnan, 2010. "Web-Based Disclosure About Value Creation Processes: A Monitoring Perspective," Abacus, Accounting Foundation, University of Sydney, vol. 46(3), pages 320-347.
    2. Liliana Feleaga & Niculae Feleaga & Mihaela Dumitrascu, 2013. "Study On The Perception Of The Corporate Performance In Accounting And Audit Firms," Annals of Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(1), pages 1316-1323, July.
    3. Denis Cormier & Marie-Josée Ledoux & Michel Magnan, 2010. "The Informational Contribution of Social and Environmental Disclosures for Investors," Post-Print hal-00481571, HAL.
    4. Raf Orens & Walter Aerts & Denis Cormier, 2010. "Web-Based Non-Financial Disclosure and Cost of Finance," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 37(9-10), pages 1057-1093, November/.
    5. repec:eee:advacc:v:30:y:2014:i:2:p:425-439 is not listed on IDEAS
    6. Samer Khalil & Michel Magnan & Paul André, 2008. "The Adoption of Deferred Share Unit Plans for Outside Directors and Shareholder Wealth," Corporate Governance: An International Review, Wiley Blackwell, vol. 16(3), pages 210-224, May.
    7. Van Geyt, Debby & Van Cauwenberge, Philippe & Vander Bauwhede, Heidi, 2014. "Does high-quality corporate communication reduce insider trading profitability?," International Review of Law and Economics, Elsevier, vol. 37(C), pages 1-14.
    8. repec:eee:ijoais:v:10:y:2009:i:1:p:1-24 is not listed on IDEAS

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