Concordia University, Canada

The impact of social and environmental transparency on financial analysts' forecast properties

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Abstract

In this paper, we examine whether social and environmental disclosure transparency affect financial analysts’ forecast error and dispersion. Our findings suggest that the level of each of social and environmental disclosure transparency is negatively associated with each of analysts’ forecast error and dispersion. We also find that this negative association becomes more pronounced for firms having low financial reporting quality, low media coverage, and governed in a weakly manner. Finally, we show that each of social and environmental disclosure transparency is negatively associated with each form of corporate-level investment inefficiencies known as under-investment and over-investment issues. Overall, our paper contributes to perceiving the role of social and environmental disclosure transparency to mitigate information asymmetry and agency problems in the contexts of financial analysts’ forecast properties and firm level investment efficiency.

Biography

My name is Mohammad Hendijani Zadeh and I am a Ph.D. candidate of accounting major at John Molson School of Business of Concordia University. In regards to my research agenda, I am interested in topics such as non-financial disclosures (e.g., corporate social responsibility (CSR), and sustainability reports), corporate governance, auditing, and application of data mining methods in accounting. In this line, for my dissertation, I focus on the determinants and consequences of social and environmental disclosure transparency. In this context, my first paper known as “Audit Quality, Media Coverage, Environmental, Social, and Governance Disclosure and Firm Investment Efficiency: Evidence from Canada” was accepted in International Journal of Accounting and Information Management which has a “B” ranking based on ABDC Journal Quality List of Australian Business Deans Council. My job market paper is also related to this domain, and it is about the impact of social and environmental transparency on financial analysts’ forecast properties (i.e., analysts’ forecast accuracy and analysts’ forecast dispersion).