The Effect of Multinationality on Security Analyst Underreaction
Author: Riahi-Belkaoui, A.1
Source: Journal of Business Finance & Accounting, Volume 29, Numbers 9-10, November/December 2002 , pp. 1355-1366(12)
Publisher: Blackwell Publishing
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Abstract:
Previous research presented evidence of bias and positive serial correlation in forecast errors suggesting that analysts do not properly recognize the time-series properties of earnings when setting expectations of future earnings. A reason for the security analyst underreaction is the level of multinationality of the firm's activities. This study shows that analysts underreact to prior information more as the level of multinationality of the firm examined increases.Keywords: multinationality; security analyst; underreaction
Document Type: Research article
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