Insider Ownership and Analyst Forecast Properties

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

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Original languageEnglish
Pages (from-to)125-150
Journal / PublicationJournal of Accounting, Auditing and Finance
Issue number1
Online published1 Mar 2017
Publication statusPublished - Jan 2019


In this article, we investigate the effect of insider ownership on analyst forecast properties and find a significant nonlinear relationship between the two. Specifically, in the low to medium range, a rise in insider ownership improves analyst forecast properties (making them more accurate and less dispersed), but a further rise in insider ownership beyond moderate levels leads to deteriorating forecasts. We also find that this nonlinear relationship is attenuated for firms in countries with better investor protection. We interpret our findings as evidence that the role of insider ownership as an interest alignment or entrenchment mechanism is diminished in these countries due to their stronger investor protection.

Research Area(s)

  • analyst forecast properties, corporate governance, information environment, insider ownership, investor protection