IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this paper

"Analysts' Earnings Forecasts and the Value Relevance of Earnings"(in Japanese)

Listed author(s):
  • Takashi Obinata

    (Faculty of Economics, University of Tokyo)

Registered author(s):

    The value relevance of earnings information depends on the information environments that investors face. In general, under the highly uncertain circumstances, information is not completely nor instantly reflected in stock prices and so the value relevance of earnings is low. The purpose of this paper is to estimate the uncertainty of information environments by data of analysts' earnings forecasts and to investigate the relationship between the uncertainty and the relevance of earnings in JP and US market. In US, though the dispersion of forecasts causes subsequent positive returns, it makes the value relevance of earnings higher. However, it seems that the divergence of opinion does not determine the information environments in JP. In JP, we cannot find the evident relationship between the dispersion and the relevance of earnings. On the other hand, analyst coverage does not affect the relevance of earnings in US while the earnings is more value relevant for firms covered by analysts than firms uncovered in JP. Moreover, the effect of optimistic forecast errors on the value relevance of earnings differs between JP and US. Our results show that earnings is value relevant and earnings information is almost efficiently reflected in stock prices while the subsequent anomalous returns concerning analysts' forecasts exist. Empirical evidence indicates that the information environments in JP are different from that in US and that the relationship between environments and the relevance of earnings also differs. This paper provides the valuable evidence against prior international comparative studies that neglect the differences in information environments.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Download Restriction: no

    Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE J-Series with number CIRJE-J-195.

    in new window

    Length: 37 pages
    Date of creation: Jun 2008
    Handle: RePEc:tky:jseres:2008cj195
    Contact details of provider: Postal:
    Hongo 7-3-1, Bunkyo-ku, Tokyo 113-0033

    Phone: +81-3-5841-5644
    Fax: +81-3-5841-8294
    Web page:

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:tky:jseres:2008cj195. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (CIRJE administrative office)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.