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Corporate Philanthropy and Analyst Forecast Accuracy: Evidence from China

Corporate Philanthropy and Analyst Forecast Accuracy: Evidence from China Based on the perspective of market attention, this study investigates financial analysts' performance in the presence of corporate philanthropy in China. We find that the involvement of corporate philanthropy is associated with lower analyst forecast error. Additionally, our results show that the favorable effect of philanthropy on analyst forecast accuracy is stronger for firms with higher and easier information exposure in the face of engaging in corporate philanthropy. Collectively, our findings have important implications for academics and practitioners in understanding the function of corporate philanthropy in financial markets. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Asia-Pacific Journal of Financial Studies Wiley

Corporate Philanthropy and Analyst Forecast Accuracy: Evidence from China

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Publisher
Wiley
Copyright
© 2022 Korean Securities Association
ISSN
2041-9945
eISSN
2041-6156
DOI
10.1111/ajfs.12394
Publisher site
See Article on Publisher Site

Abstract

Based on the perspective of market attention, this study investigates financial analysts' performance in the presence of corporate philanthropy in China. We find that the involvement of corporate philanthropy is associated with lower analyst forecast error. Additionally, our results show that the favorable effect of philanthropy on analyst forecast accuracy is stronger for firms with higher and easier information exposure in the face of engaging in corporate philanthropy. Collectively, our findings have important implications for academics and practitioners in understanding the function of corporate philanthropy in financial markets.

Journal

Asia-Pacific Journal of Financial Studies – Wiley

Published: Oct 1, 2022

Keywords: Corporate philanthropy; Market attention; Analyst forecast accuracy; G29; H32; M14

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