Product market pricing power, industry concentration and analysts’ earnings forecasts

Datta, Sudip; Iskandar‐Datta, Mai; Sharma, Vivek

doi:10.1016/j.jbankfin.2010.10.016

Cited by 86 publications

(61 citation statements)

References 46 publications

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“…This variable measures industry concentration and it decreases with the number of competitors. Thus, it indicates whether a firm is facing high product market competition (Datta, Iskandar‐Datta, and Sharma, ). A growing body of research has emphasized that product market competition enhances the quality of corporate governance and serves as an effective external disciplinary mechanism that mitigates agency conflicts.…”

Section: Does the Severity Of Agency Problems Matter?mentioning

confidence: 99%

The Role of Multiple Large Shareholders in the Choice of Debt Source

Boubaker¹,

Rouatbi²,

Saffar

2016

Financial Management

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This paper examines the effect of multiple large shareholders (MLS) on debt choice. Using a sample of 654 French‐listed firms over the period 1998‐2013, we find that reliance on bank debt increases with the presence and voting power of MLS. This result is robust to endogeneity concerns and to several sensitivity tests. Moreover, we find that the effect of MLS on debt choice is more pronounced when agency problems between controlling and minority shareholders are more severe. Taken together, our results suggest that MLS reduce the controlling owner's incentive to avoid bank monitoring, leading to greater reliance on bank debt.

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Section: Does the Severity Of Agency Problems Matter?mentioning

confidence: 99%

The Role of Multiple Large Shareholders in the Choice of Debt Source

Boubaker¹,

Rouatbi²,

Saffar

2016

Financial Management

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“…Strategic interactions among firms have been found to be important in explaining firms' capital structure choices (e.g., Clayton and Ravid, 2002), strategic investment decisions (Sundaram et al, 1996;Chen et al, 2002), share repurchase decisions (Massa et al, 2007), executive compensation schemes (Aggarwal and Samwick, 1999;Kedia, 2006;Cuñat and Guadalupe, 2009), and analyst earnings forecast accuracy (Datta et al, 2011). These studies do not explore the role of strategic competition in the nature of earnings information conveyed by corporate actions.…”

Section: Introductionmentioning

confidence: 99%

“…2 Sundaram et al (1996) and Chen et al (2002), however, provide no evidence regarding the importance of strategic interaction in explaining changes in earnings expectations. As Datta et al (2011) suggest, strategic interaction within a product market influences a firm's ability to maintain its profit margin and set its product prices. Thus, strategic interactions among firms may affect market expectations of earnings at the time of new strategic initiative announcements.…”

Section: Introductionmentioning

confidence: 99%

The impact of strategic interaction on earnings expectations associated with corporate product strategies

Chen

Lin

2012

Journal of Banking & Finance

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“…doi:10.1016/j.jbankfin.2011.01.006 informativeness of forecasts, and analyst economic incentives (e.g., Datta et al, 2011;de Jong and Apilado, 2009;Güntay and Hackbarth, 2010), very little attention is given to the timing of analyst forecasts and factors associated with this timing. Guttman (2010) is an important exception.…”

Section: Introductionmentioning

confidence: 99%

Analyst characteristics, timing of forecast revisions, and analyst forecasting ability

Kim

Lobo

Song

2011

Journal of Banking & Finance

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a b s t r a c tWe first examine whether analysts with certain characteristics that prior research has identified are related to superior forecasting ability systematically time their forecast revisions later in the fiscal quarter. We then examine whether this superior ability persists after controlling for the timing advantage by using relative forecast error, a measure that largely eliminates the timing advantage of recent forecasts. Using a sample of quarterly earnings forecast revisions over the 20-year period from 1990 to 2009, we find that analysts with more firm-specific and general experience and more accurate prior-period forecasts, analysts employed by larger brokerage firms, and analysts who follow fewer industries and companies tend to revise forecasts later in the quarter. We also find that analyst characteristics that are positively correlated with revision timing are negatively related to relative forecast errors. These results are consistent with analyst characteristics being useful proxies for analyst forecasting ability and analysts with greater ability revising forecasts later in the quarter.

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Product market pricing power, industry concentration and analysts’ earnings forecasts

Cited by 86 publications

References 46 publications

The Role of Multiple Large Shareholders in the Choice of Debt Source

The Role of Multiple Large Shareholders in the Choice of Debt Source

The impact of strategic interaction on earnings expectations associated with corporate product strategies

Analyst characteristics, timing of forecast revisions, and analyst forecasting ability

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