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Political uncertainty and analysts’ forecasts: International evidence

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  • Boubakri, Narjess
  • Bouslimi, Lobna
  • Zhong, Rui

Abstract

This study examines the influence of political uncertainty proxied by national election on analysts’ forecasts across 28 countries. We find analysts’ forecasts’ accuracy decreases, and the optimism increases in national election years compared to these in non-election years. Further analysis supports information opacity, local political connections, politically sensitives industries and the quality of institutions channels through which political uncertainty affects the analysts’ forecasts.

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  • Boubakri, Narjess & Bouslimi, Lobna & Zhong, Rui, 2022. "Political uncertainty and analysts’ forecasts: International evidence," Journal of Financial Stability, Elsevier, vol. 59(C).
    • Handle: RePEc:eee:finsta:v:59:y:2022:i:c:s1572308922000018
    DOI: 10.1016/j.jfs.2022.100971
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    Cited by:

    1. Liu, Xingyu & Kok Loang, Ooi, 2023. "Analysts’ forecast optimism and cash holding: Evidence from China," Finance Research Letters, Elsevier, vol. 57(C).

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    More about this item

    Keywords

    Political uncertainty; National elections; Analysts’ forecasts; Information asymmetry; Political connection;
    All these keywords.

    JEL classification:

    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • P47 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Performance and Prospects
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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