Are accurate bold forecasts better than accurate non-bold forecasts? Investors’ reactions to the joint effect of forecast boldness salience and forecast timing
In this study, I conduct an experiment to investigate how financial analysts‘ forecast boldness salience and forecast timing jointly influence investors‘ willingness to pay for investment advice, holding constant the accuracy of the forecast. I consider forecast boldness salience to refer to the ext...
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| Other Authors: | |
| Format: | Thesis |
| Language: | English |
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2013
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| Online Access: | https://hdl.handle.net/10356/51234 |
| _version_ | 1811682772913225728 |
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| author | Bo, Zhou |
| author2 | Tan Hun Tong |
| author_facet | Tan Hun Tong Bo, Zhou |
| author_sort | Bo, Zhou |
| collection | NTU |
| description | In this study, I conduct an experiment to investigate how financial analysts‘ forecast boldness salience and forecast timing jointly influence investors‘ willingness to pay for investment advice, holding constant the accuracy of the forecast. I consider forecast boldness salience to refer to the extent that the magnitude of the analyst‘s forecast stands out from that made by others in terms of its boldness (magnitude of the forecast relative to the average forecast made by others) and uniqueness (whether there are other individual forecasts that are close or similar to this forecast). Forecast timing refers to whether analysts issue their forecasts earlier or later relative to other analysts. I find that for an early analyst, investors‘ willingness to pay for advice increases once his/her forecast is confirmed by the follower analyst(s). In contrast, for a late analyst, investors‘ willingness to pay for advice decreases if his/her forecast is non-bold. My results enrich our understanding on the joint effect of forecast characteristics on investor reaction to analysts‘ forecasts. I show that the effect of analysts‘ forecast boldness is contingent on both forecast uniqueness and forecast timing. My study has practical implications on forecasting strategies for financial analysts. |
| first_indexed | 2024-10-01T04:02:09Z |
| format | Thesis |
| id | ntu-10356/51234 |
| institution | Nanyang Technological University |
| language | English |
| last_indexed | 2024-10-01T04:02:09Z |
| publishDate | 2013 |
| record_format | dspace |
| spelling | ntu-10356/512342024-01-12T10:13:43Z Are accurate bold forecasts better than accurate non-bold forecasts? Investors’ reactions to the joint effect of forecast boldness salience and forecast timing Bo, Zhou Tan Hun Tong Nanyang Business School DRNTU::Business::Accounting. In this study, I conduct an experiment to investigate how financial analysts‘ forecast boldness salience and forecast timing jointly influence investors‘ willingness to pay for investment advice, holding constant the accuracy of the forecast. I consider forecast boldness salience to refer to the extent that the magnitude of the analyst‘s forecast stands out from that made by others in terms of its boldness (magnitude of the forecast relative to the average forecast made by others) and uniqueness (whether there are other individual forecasts that are close or similar to this forecast). Forecast timing refers to whether analysts issue their forecasts earlier or later relative to other analysts. I find that for an early analyst, investors‘ willingness to pay for advice increases once his/her forecast is confirmed by the follower analyst(s). In contrast, for a late analyst, investors‘ willingness to pay for advice decreases if his/her forecast is non-bold. My results enrich our understanding on the joint effect of forecast characteristics on investor reaction to analysts‘ forecasts. I show that the effect of analysts‘ forecast boldness is contingent on both forecast uniqueness and forecast timing. My study has practical implications on forecasting strategies for financial analysts. DOCTOR OF PHILOSOPHY (NBS) 2013-03-07T07:30:25Z 2013-03-07T07:30:25Z 2013 2013 Thesis Zhou, B. (2013). Are accurate bold forecasts better than accurate non-bold forecasts? : investors’ reactions to the joint effect of forecast boldness salience and forecast timing. Doctoral thesis, Nanyang Technological University, Singapore. https://hdl.handle.net/10356/51234 10.32657/10356/51234 en 69 p. application/pdf |
| spellingShingle | DRNTU::Business::Accounting. Bo, Zhou Are accurate bold forecasts better than accurate non-bold forecasts? Investors’ reactions to the joint effect of forecast boldness salience and forecast timing |
| title | Are accurate bold forecasts better than accurate non-bold forecasts? Investors’ reactions to the joint effect of forecast boldness salience and forecast timing |
| title_full | Are accurate bold forecasts better than accurate non-bold forecasts? Investors’ reactions to the joint effect of forecast boldness salience and forecast timing |
| title_fullStr | Are accurate bold forecasts better than accurate non-bold forecasts? Investors’ reactions to the joint effect of forecast boldness salience and forecast timing |
| title_full_unstemmed | Are accurate bold forecasts better than accurate non-bold forecasts? Investors’ reactions to the joint effect of forecast boldness salience and forecast timing |
| title_short | Are accurate bold forecasts better than accurate non-bold forecasts? Investors’ reactions to the joint effect of forecast boldness salience and forecast timing |
| title_sort | are accurate bold forecasts better than accurate non bold forecasts investors reactions to the joint effect of forecast boldness salience and forecast timing |
| topic | DRNTU::Business::Accounting. |
| url | https://hdl.handle.net/10356/51234 |
| work_keys_str_mv | AT bozhou areaccurateboldforecastsbetterthanaccuratenonboldforecastsinvestorsreactionstothejointeffectofforecastboldnesssalienceandforecasttiming |