Do Analysts Impound and Understand the Informativness of Customer Concentration?

  • 周 佳蓉

Student thesis: Doctoral Thesis

Abstract

Prior studies suggest that customer concentration is a leading indicator of performance in business because efficiencies accrue to suppliers with concentrated customer bases This study uses samples from 1988 to 2018 listed companies in the U S to examine whether analysts accurately capture and understand the information contained in measures of customer concentration This study hypothesizes that analysts can incorporate changes in customer concentration in their earnings forecasts but often can’t fully understand the meaning of them This study finds that analysts revise their earnings forecasts in response to changes in customer concentration even though they do not fully understand the implications of what is contained in their customer concentration data The study then provides evidence that analysts with more experience are better at appreciating the implications of customer concentration data than others Overall our findings suggest that analysts often have difficulty completely understanding the meaning of complicated information
Date of Award2020
Original languageEnglish
SupervisorTing-Kai Chou (Supervisor)

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