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Accounting Conservatism, Analysts’ Performance and Stock Market Liquidity
Boussaid, Nabila; Hamza, Taher; Sougné, Danielle
2016
 

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Keywords :
conditional accounting conservatism; revision volatility; stock market liquidity; forecast error; forecast dispersion
Abstract :
[en] This paper investigates whether conditional accounting conservatism has informational benefits to financial market participants. Using a large sample of French firms over the period 2001-2014, we report that accounting conservatism improves the firm information environment by providing verifiable information. We specifically document that increases in accounting conservatism are associated with more accurate analyst earnings forecasts, less dispersed forecasts and less volatility in forecast revisions. We also provide evidence that increases in firm accounting conservatism lead to subsequent increases in stock market liquidity, tested on the price impact dimension. Overall, our findings are in line with conservatism being useful to financial markets participants such as financial analysts and investors.
Disciplines :
Finance
Author, co-author :
Boussaid, Nabila ;  Université de Liège - ULiège > Doct. sc. écon. & gest. (sc. gestion - Bologne)
Hamza, Taher
Sougné, Danielle ;  Université de Liège > HEC-Ecole de gestion : UER > Gestion financière et consolidation
Language :
English
Title :
Accounting Conservatism, Analysts’ Performance and Stock Market Liquidity
Publication date :
15 April 2016
Number of pages :
27
Event name :
2nd HEC Research day
Event organizer :
HEC-ULG
Event date :
15 Avril 2016
Available on ORBi :
since 26 May 2016

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