Analysts' forecasts of german firms' earnings: a comparative analysis

John Capstaff, Krishna Paudyal, William Rees

Research output: Contribution to journalArticle

36 Citations (Scopus)

Abstract

This paper examines analysts' forecasts of the annual earnings per share of German firms over the period of February 1987 to December 1995. The German case is particularly interesting as the accounting and institutional structures vary from those in more thoroughly researched markets such as the U.S. or U.K. The paper therefore considers the features of the German forecasting environment which distinguish it from the Anglo-American model, and whether these might be reflected in forecasting performance. The results for Germany show that the accuracy of analysts' forecasts improves as the forecast horizon shortens, are less accurate than a naive prediction model over longer horizons, and contain a positive bias. When the results for Germany are contrasted with the results for the U.K., as reported in a recent paper, they are found to be a little less accurate but the positive bias is greater in U.K. forecasts. Taken overall the forecasting process in Germany appears to be less efficient than in the U.K., but this may be due to the distinct features of the German forecasting environment.

LanguageEnglish
Pages83-116
Number of pages34
JournalJournal of International Financial Management and Accounting
Volume9
Issue number2
DOIs
Publication statusPublished - 30 Jun 1998

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Analysts' forecasts
Comparative analysis
Germany
Prediction model
Forecast horizon
Earnings per share
Institutional structure
Forecasting performance

Keywords

  • forecasts
  • Germany
  • performance

Cite this

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Analysts' forecasts of german firms' earnings : a comparative analysis. / Capstaff, John; Paudyal, Krishna; Rees, William.

In: Journal of International Financial Management and Accounting, Vol. 9, No. 2, 30.06.1998, p. 83-116.

Research output: Contribution to journalArticle

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