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The Effects of Foreign Equity Ownership on Earnings Forecasts in China

Author

Listed:
  • DENNIS K.K. FAN
  • GLADIE M.C. LUI
  • RAYMOND W. SO

Abstract

In this article, the accuracy of analysts' earnings forecasts in China is studied. Chinese-listed firms with foreign ownership need to report their financial statements in accordance with both Chinese and international accounting standards. This reporting environment offers a good testing ground for the hypothesis that forecasting error is an inverse function of the availability of relevant information. Empirical evidence indicates that firms with foreign ownership tend to have lower forecasting errors. This result demonstrates the value and positive influence of foreign investment in China.

Suggested Citation

  • Dennis K.K. Fan & Gladie M.C. Lui & Raymond W. So, 2005. "The Effects of Foreign Equity Ownership on Earnings Forecasts in China," Chinese Economy, Taylor & Francis Journals, vol. 38(2), pages 36-55, March.
    • Handle: RePEc:mes:chinec:v:38:y:2005:i:2:p:36-55
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    Cited by:

    1. Roshayani Arshad Author_Email: roshayani@salam.uitm.edu.my & Rohaya Md Nor & Nur Adura Ahmad Noruddin, 2011. "Ownership Structure And Interaction Effects Of Firm Performance On Management Commentary Disclosures," 2nd International Conference on Business and Economic Research (2nd ICBER 2011) Proceeding 2011-332, Conference Master Resources.
    2. Bartholdy, Jan & Feng, Tiyi, 2013. "The quality of securities firms' earnings forecasts and stock recommendations: Do informational advantages, reputation and experience matter in China?," Pacific-Basin Finance Journal, Elsevier, vol. 24(C), pages 66-88.
    3. Huang, Wei & Wright, Brian, 2015. "Analyst earnings forecast under complex corporate ownership in China," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 35(C), pages 69-84.

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