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The effects of information transparency on analysts& forecasts: evidence from the information disclosure and transparency ratings system in Taiwan
Journal article

The effects of information transparency on analysts& forecasts: evidence from the information disclosure and transparency ratings system in Taiwan

Hsihui Chang, Ruey-Dang Chang and Chun-Ju Fang
Asia-Pacific journal of accounting & economics, v 20(4), pp 405-428
01 Dec 2013

Abstract

analysts' earnings forecast dispersion analysts' earnings forecast errors IDTRS
In an attempt to reduce the information asymmetry between corporate insiders and outsiders, the Taiwan Stock Exchange Corporation (TSEC) and the Gre Tai Securities Market (GTSM) requested the Securities and Futures Institute to implement an information disclosure and transparency ratings system (IDTRS) for all publicly traded companies listed on the TSEC and the GTSM. This study investigates the effects of the IDTRS on the properties of analysts' forecasts. The results indicate that analysts' earnings forecasts are more accurate and the earnings forecast dispersion among analysts decreases after the implementation of the IDTRS. Additionally, the results estimated from the post IDTRS period show that the analysts' earnings forecast errors and dispersion of the "more transparent" companies are smaller than those of the "less transparent" companies.

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Collaboration types
Domestic collaboration
International collaboration
Web of Science research areas
Business, Finance
Economics
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