Title: The prominence of behavioural biases in analysts' earnings forecast accuracy

Authors: Semra Bank; Duygu Arslantürk Çöllü

Addresses: Department of Business Administration, Faculty of Economics and Administrative Sciences, Karadeniz Technical University, Trabzon, Turkey ' Department of Business Administration, Faculty of Economics and Administrative Sciences, Iğdır University, Iğdır, Turkey

Abstract: Some studies in the relevant literature imply that financial analysts' earnings forecasts are biased. To further investigate these prior results, this study aims to list and prioritise three groups of factors and sub-factors in each factor group that have an effect on analysts' earnings forecast accuracy. In line with this aim, this study uses a combined DEMATEL-ANP hybrid model. The results reveal that optimism and herding behaviour have greater prominence than others among a list of factors affecting financial analysts' earnings forecast accuracy. In turn, this result confirms the irrationality of financial analysts in their earnings forecasts.

Keywords: financial analysts' earnings forecasts; financial analysts' earnings forecast accuracy; forecast bias; DEMATEL; analytic network process; ANP.

DOI: 10.1504/JIBED.2022.130366

Journal for International Business and Entrepreneurship Development, 2022 Vol.14 No.4, pp.507 - 535

Received: 05 Jan 2022
Accepted: 12 Sep 2022
Published online: 18 Apr 2023 *

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