Cross-border regulatory cooperation and analyst forecasts

Tsang，Albert1; Xiang，Yi2; Yu，Li3

2023-11-01

10.1016/j.irfa.2023.102844

International Review of Financial Analysis   Impact Factor & Quartile

1057-5219

1873-8079

Using the staggered entry of foreign countries into the Multilateral Memorandum of Understanding (MMoU) as a shock to the cross-border regulatory cooperation and information exchange, we find that foreign firms cross-listed in the U.S. show a greater level of analyst following and a significant reduction in analyst forecast error and dispersion after their foreign home countries join the MMoU. Furthermore, the effect of the MMoU on analysts tends to be stronger for cross-listed firms with a greater level of information opacity and for analysts with greater difficulty forecasting cross-listed firms. To examine the potential channel, we find an increase in information/financial statement comparability after the entry of the MMoU by a firm's foreign home country. Collectively, our findings suggest that strengthened cross-border regulatory cooperation has a significant effect on reducing analyst information processing costs.

Analyst forecasts Cross-border enforcement Cross-listing

SSCI

English

First

Business & Economics

Business, Finance

WOS:001088214700001

ELSEVIER SCIENCE INC

2-s2.0-85166918645

Scopus

1.SUSTech Business School,Southern University of Science and Technology,China
2.School of Accounting and Finance,The Hong Kong Polytechnic University,Hong Kong
3.Business School,Nankai University,China

Tsang，Albert,Xiang，Yi,Yu，Li. Cross-border regulatory cooperation and analyst forecasts[J]. International Review of Financial Analysis,2023,90.

Tsang，Albert,Xiang，Yi,&Yu，Li.(2023).Cross-border regulatory cooperation and analyst forecasts.International Review of Financial Analysis,90.

Tsang，Albert,et al."Cross-border regulatory cooperation and analyst forecasts".International Review of Financial Analysis 90(2023).