| Economic geography is a subject of the regional system of human economic activity.It explains the cross-spatial distribution of economic activity.With the rise of economic geography,many scholars have introduced it into finance and finance.Foreign scholars in this research can be roughly divided into seven categories:such as geographical factors on the dividend policy,return on investment,financing,mergers and acquisitions,corporate governance,corporate decision-making,accounting information disclosure,the influence of bank loans,etc.However,domestic scholars in this research is not a lot,and the domestic scholars study the correlation between geography and economic activities,adopt the geographical spatial distance is the absolute index,namely measure geographic latitude and longitude of the distance between two index.After studying a large number of literatures at home and abroad,this paper attempts to use the relative indexes of geographical factors to study the relative problems of economic geography in the financial field.With the development of economy,many companies have developed branch offices all over the country and even overseas.The differences of the number and distribution of the branch are bound to affect the overall financial information of the enterprise,which will affect the forecasting behavior of the analysts.Therefore,this paper explains the influence of geographical dispersion level of operating activities on the accuracy of analysts’ earnings prediction based on the geographical concentration of enterprise operation activity.It is of great theoretical significance and practical significance for the study of the prediction behavior of securities analysts in China.In theory,there are two main theoretical bases:information asymmetry theory and portfolio theory.Based on the above theories,we propose the following hypothesis:(1)the degree of geographical diversification of enterprise operation activities is related to the quality of analyst’s forecast.The more decentralized the business,the lower the analyst’s forecast.(2)the degree of geographical diversification of enterprise operation activities is related to the quality of financial information.The more decentralized the business,the lower the quality of financial information.(3)the degree of geographical diversification of enterprise operation activities is related to the stability of performance indicators.The more decentralized the operation,the more unstable the performance indicators.(4)the degree of geographical diversification of enterprise operation activities is related to the quality of information disclosure.The more decentralized the business,the lower the quality of information the company discloses.In order to research the problem above,this article selects the January 1,2007 to December 31,2016,during the corporate annual reports of listed companies in China subsidiary geographic distribution of data and securities analysts forecast for non-financial data as the research object.With the geographical concentration,number of subsidiaries,and whether the company as a local company to measure geographic diversification of enterprise business activities,with analyst earnings forecast accuracy,forecast forecast two aspects of securities analyst said differences quality.The relationship between the geographic distribution of business operation and the forecast quality of the analyst is studied.Based on the data from 2007 to 2016 listed companies as samples,using OLS regression and panel data and fixed effects regression,multi-valued choice model namely ologit regression to assume a variety of measurement methods such as empirical research,in order to guarantee the robustness,this paper USES the geographical dispersion level alternative definition,analysts predict the quality of the alternative definition of hypothesis has carried on the empirical research,at the same time on the choice of sample includes companies with subsidiaries in Hong Kong,Macao and Taiwan area.Through the empirical study,we have concluded that(1)the geographical concentration of the company is positively correlated with the forecast quality of analysts.The higher the concentration,the more accurate the analyst’s prediction and the higher the quality.(2)the geographical concentration of the company is positively correlated with the quality of accounting information.The higher the concentration,the higher the quality of accounting information and the higher the analyst’s forecast.(3)the geographical concentration associated with fluctuations in performance indicators,including the geographical concentration of positively related to the earnings volatility and market returns,is negatively related to the business activities net cash flow volatility.The geographical concentration of the company affects the performance fluctuation index of the enterprise,and thus the quality of the analyst’s forecast.(4)the company’s geographical concentration is positively correlated with the quality of information disclosure.The higher the concentration,the higher the quality of the public disclosure,the more accurate the analyst’s prediction,the smaller the deviation,the smaller the divergence,and the higher the analyst’s forecast.The innovation of this paper is to try to use a relative index to measure the impact of geographical factors on economic activity.The study of geography economics in the field of forecasting behavior of analysts is supplemented.Parent-subsidiary by listed companies in various provinces,autonomous regions,municipalities directly under the central government to verify the number of distribution due to the geographical diversification of business activities caused by asymmetric information,financial information quality and performance indicators of volatility and selective disclosure of information of analyst earnings forecast quality problems such as whether to have influence,so as to enrich the geography research in the field of financial economics. |
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