Missing analyst forecasts and corporate fraud: evidence from China
The relationship between analysts' forecasts and corporate fraud is a vital theoretical and practical question that needs to be clarified. Based on a strict distinction between negative performance gaps relative to analyst forecasts (negative forecast gaps hereinafter) and analyst coverage, thi...
| Authors: | ; ; |
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| Format: | Electronic Article |
| Language: | English |
| Check availability: | HBZ Gateway |
| Journals Online & Print: | Drawer...
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| Fernleihe: | Fernleihe für die Fachinformationsdienste |
| Published: |
Springer Science + Business Media B. V
2022
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| In: |
Journal of business ethics
Year: 2022, Volume: 181, Issue: 1, Pages: 171-194 |
| Further subjects: | B
Analyst coverage
B Corporate fraud B Aufsatz in Zeitschrift B Negative forecast gaps |
| Online Access: |
Volltext (lizenzpflichtig) Volltext (lizenzpflichtig) |
| Summary: | The relationship between analysts' forecasts and corporate fraud is a vital theoretical and practical question that needs to be clarified. Based on a strict distinction between negative performance gaps relative to analyst forecasts (negative forecast gaps hereinafter) and analyst coverage, this study investigates the influence of analyst forecasts on corporate fraud from a panoramic perspective. Using panel data on listed companies in China from 2008 to 2019, we find that short-term performance pressure caused by negative forecast gaps is significantly positively correlated with firms’ possibility for fraudulent behavior. However, this positive correlation is weaker in state-owned enterprises than in their non-state-owned counterparts. Further, as a key external governance mechanism, analyst coverage enhances the negative moderator effect of state ownership on the positive relationship between negative forecast gaps and the likelihood of corporate fraud. |
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| ISSN: | 1573-0697 |
| Contains: | Enthalten in: Journal of business ethics
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| Persistent identifiers: | DOI: 10.1007/s10551-021-04837-w |