Ownership structure and analysts' forecast properties: a study of Chinese listed firms

Purpose - The purpose of this paper is to investigate the association between ownership structure and the properties of analysts' forecasts in China's unique corporate setting. Design/methodology/approach - Multiple regression models were used to examine the influence of ownership structure mechanisms on analysts' forecast properties for listed Chinese firms during the period 2008-2012. Findings - The paper finds that analysts' forecast accuracy is higher for listed firms with high levels of foreign ownership and managerial ownership. However, the complex pyramidal ownership structure could make corporate information less transparent and then increase the complexity of forecasting; hence, it results in less precise analysts' forecasts. Interestingly, the relationship between state ownership and analysts' forecast properties appears to be non-linear (an inverted U-shape), and the inflection point at which the relationship becomes negative occurs at state ownership over 45 per cent. Originality/value - To the best of the author's knowledge, this paper is the first to investigate the influence of ownership structure mechanisms on the properties of analysts' forecasts in an emerging market, and the findings provide some insight on how the properties of analysts' forecast might be shaped by certain ownership and control features in the context of concentrated state ownership and complex pyramidal ownership structure.