Earnings forecast errors: Comparative evidence from the Pacific-Basin capital markets

Abstract

This paper examines the analysts earnings forecasts in Pacific-Basin capital markets vis-à-vis those of the U.S. We first compare forecast errors across countries and then perform regression analyses to identify the factors that explain differences in forecast errors. The results suggest that there are substantial differences in forecast errors between most of the Pacific-Basin capital markets and the more established capital markets such as the U.S. and Japan. These differences significantly decrease as the forecast horizon approaches the earnings reporting month. The regression results identify some macroeconomic and firm specific factors that explain the differences in forecast errors.