Title: The impact of country-level corporate governance on analyst boldness and performance with target price forecasts

Authors: Samie Ahmed Sayed; Deepak Chawla

Addresses: ITM Business School, Plot No. 25 and 26, Sector 4, Kharghar, Navi Mumbai 410210, India ' International Management Institute, B-10, Qutab Institutional Area, Near Tara Crescent, New Delhi 110 016, India

Abstract: This study investigates the impact of country-level corporate governance on analyst boldness and performance with target price forecasts in Asian markets. Results suggest that analysts working in countries with better corporate governance standards have higher boldness with target price forecasts reflecting higher confidence in a more transparent environment. However, the study fails to establish a consistent relationship between country-level corporate governance and analyst performance with target price forecasts. The positive effects of better country-level corporate governance on analyst target price performance are visible only in the short-term and not at the end of the forecast horizon of one year. Past studies document a positive relationship between analyst accuracy and better corporate governance in western markets; we find partial evidence of the benefits of better country-level corporate governance on analyst target price performance in Asian markets.

Keywords: corporate governance; equity research; analyst accuracy; target price forecasts; target prices; price forecasting; analyst boldness; analyst performance; Asian markets; stock markets; equity analysts; financial analysts.

DOI: 10.1504/IJICBM.2017.081976

International Journal of Indian Culture and Business Management, 2017 Vol.14 No.2, pp.237 - 255

Received: 10 Sep 2015
Accepted: 29 Mar 2016
Published online: 31 Jan 2017 *

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