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How does foreign economic policy uncertainty affect domestic analyst earnings forecasts?

Author

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  • Song, Jian
  • Zhou, Xiaozhou

Abstract

This study examines the impact of foreign economic policy uncertainty (EPU) on the performance of domestic analyst earnings forecasts. We separately analyze how U.S. EPU affects the accuracy of analyst earnings forecasts in other markets and the reverse relationship. Our findings indicate that the U.S. EPU (non-U.S. Global EPU) negatively (positively) affects the accuracy of analyst earnings forecasts in other economies (the U.S.). We find that the economic dependency of a given economy on the U.S. (capital flow to the U.S.) is a channel for this negative (positive) impact. Our results remain robust after controlling for a comprehensive set of variables.

Suggested Citation

  • Song, Jian & Zhou, Xiaozhou, 2025. "How does foreign economic policy uncertainty affect domestic analyst earnings forecasts?," Global Finance Journal, Elsevier, vol. 65(C).
    • Handle: RePEc:eee:glofin:v:65:y:2025:i:c:s1044028325000146
    DOI: 10.1016/j.gfj.2025.101087
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    More about this item

    Keywords

    Analyst earnings forecasts; Economic policy uncertainty (EPU); Information dissemination; Economic dependency; Capital flows;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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