National culture and analysts’ forecasting

Cao, Ying; Hao, Rubin; Yang, Yong

doi:10.1007/s11142-022-09752-7

Cited by 3 publications

(2 citation statements)

References 76 publications

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“…(2021), for instance, find that the association between analysts’ perceived work–life balance and performance is subject to an inflection point where employee performance improves (decreases) with work–life balance when the current level is below (above) this point. Such inflection points, however, have not been identified in studies about the impact of national or corporate culture on analyst performance (Cao et al ., 2020; Pacelli, 2019). Thus, the precise relationship between OC and analyst behavioural outcomes remains an open question.…”

Section: Literature Interviews and Research Questionsmentioning

confidence: 99%

“…The focus of our paper is echoed in the literature that studies the impact of cultural factors on economic outcomes (Guiso et al ., 2006, 2015). Specifically, in the analyst literature, studies have investigated the impact of culture (variously defined) on analyst performance, with culture being operationalized at the national (Cao et al ., 2020; Clement et al ., 2003), organizational (Hope et al ., 2021; Pacelli, 2019), and individual levels, for example, as ‘cultural distance’ between CEOs and analysts (Frijns and Garel, 2021).…”

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confidence: 99%

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The Effect of Organizational Climate on Sell‐side Analyst Turnover and Performance

Chua,

Kuang,

2023

Abacus

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This paper investigates whether and how organizational climate (OC) in brokerage firms affects analyst turnover and performance. We find that firms with a lower‐rated OC have a higher likelihood of analyst turnover. Also, when analysts leave and switch brokerage firms, they are more likely to move to a firm with a higher‐rated OC and will deliver more accurate forecasts after switching firms. However, the performance improvements in better‐rated OC firms are significant only for the initial years of the analysts’ employment in the new firms. We also show that OC‐related analyst turnover negatively affects the performance of incumbent analysts, especially for those non‐All‐Star incumbent analysts, while these adverse performance effects are also transitory and last for two years only. Thus, our findings indicate that OC only has a short‐lived effect on the behaviour of both leaving and remaining analysts, which challenges the long‐held assumption that investments in a positive OC will always be associated with lower employee turnover and higher individual performance. We explain our results as arising from the high levels of labour mobility within the brokerage industry and the transparency of analyst forecasts as a public performance measure.

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Section: Literature Interviews and Research Questionsmentioning

confidence: 99%