ScholarWorks@숙명여자대학교

초록

This research provides a paradigm in which researchers investigate the true response of investors to the information contents in analysts’ earnings forecasts. The existing paradigm assumes that investor expectation about new earnings information is identical to analyst expectation. Investor expectation is unlikely to mirror analyst expectation and likely to reflect the forecasting behavior of analysts. This article proposes that the existing research paradigm to test the investor reaction to earnings surprises may be misspecified and suggests two testable hypotheses, the naïve expectations hypothesis (NEH) and rational expectations hypothesis (REH), given the forecasting behavior of analysts. The new paradigm can be generalized to other investment relations.

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