Abstract
This paper aims to research the context within which sell‐side financial analysts make decisions to use corporate non‐financial information. Prior research has demonstrated that financial analysts take into account non‐financial information in their analyses of firms, but knowledge is scarce about what determines their use of this information. Based on a survey conducted among Belgian financial analysts, we observe a significant negative association between the financial analysts’ use of non‐financial information and the earnings informativeness of a firm's financial statement information proxied by leverage and stock return volatility. We also find that a higher amount of non‐financial information is used by less experienced financial analysts and by financial analysts covering a higher number of firms.
Notes
Raf Orens is Assistant Professor in Accountancy at Lessius (K. U. Leuven), Belgium and Nadine Lybaert is Associate Professor in Accountancy at Hasselt University (KIZOK), Belgium.
The authors gratefully acknowledge the anonymous reviewers, the editor and the participants at the 1st workshop on visualising, measuring and managing intangibles and intellectual capital in Ferrara.
Correspondence should be addressed to: Raf Orens, Assistant Professor Accountancy, Lessius (K. U. Leuven), Department of Business Studies, Korte Nieuwstraat 33, 2000 Antwerpen, Belgium. E‐mail: [email protected].