THE IMPACT OF STRATEGY, INDUSTRY AND CULTURE ON FORECASTING THE PERFORMANCE OF GLOBAL COMPETITORS: A STRATEGIC PERSPECTIVE

JEFFREY P. KATZ, MARILYN T. ZARZESKI, AND H. JOHN HALL


Abstract

This study examines how business strategy, industry competitive environment and national culture affect the accuracy and level of agreement among financial analysts who predict the future earnings of international competitors. Recent research has reported the increasing importance played by financial analysts regarding the stock price and market value of firms. Analysts' forecasts of performance have been found to significantly affect the cost of capital, valuation and stock price changes of firms. As the incidence of cross-national mergers and acquisitions continues to escalate, understanding factors that systematically affect performance predictions becomes increasingly important, especially for firms employing cross-national merger or acquisition strategies. We find that business strategies affect the accuracy of analysts' performance estimates while national culture plays an important role in determining the level of agreement among analysts' predictions. Implications and plans of action for international management practitioners and researchers are discussed

Sub Content Box

Gibson D. Lewis
Center For Business and
Economic Development
SHSU Box 2056
Huntsville TX 77341-2056
936-294-1518 Center Office
936-294-3957 Center Fax