Climate Disasters and Analysts’ Earnings Forecasts: Evidence from the United States

References

• Abarbanell, J. S. (1991). Do analysts’ earnings forecasts incorporate information in prior stock price changes? Journal of Accounting and Economics, 14(2), 147–165. https://doi.org/10.1016/0165-4101(91)90003-7
   Web of Science ®Google Scholar
• Addoum, J. M., Ng, D. T., & Ortiz-Bobea, A. (2020). Temperature shocks and establishment sales. The Review of Financial Studies, 33(3), 1331–1366. https://doi.org/10.1093/rfs/hhz126
   Web of Science ®Google Scholar
• Albouy, D., Graf, W., Kellogg, R., & Wolff, H. (2016). Climate amenities, climate change, and American quality of life. Journal of the Association of Environmental and Resource Economists, 3(1), 205–246. https://doi.org/10.1086/684573
   Web of Science ®Google Scholar
• Amiram, D., Landsman, W. R., Owens, E. L., & Stubben, S. R. (2018). How are analysts’ forecasts affected by high uncertainty? Journal of Business Finance & Accounting, 45(3-4), 295–318. https://doi.org/10.1111/jbfa.12270
   Web of Science ®Google Scholar
• Baker, S. R., Bloom, N., & Davis, S. J. (2016). Measuring economic policy uncertainty. The Quarterly Journal of Economics, 131(4), 1593–1636. https://doi.org/10.1093/qje/qjw024
   Web of Science ®Google Scholar
• Baker, S. R., Bloom, N., Davis, S. J., Kost, K. J., Sammon, M. C., & Viratyosin, T. (2020). The unprecedented stock market impact of COVID-19 (No. w26945). National Bureau of Economic Research.
   Google Scholar
• Barry, C. B., & Jennings, R. H. (1992). Information and diversity of analyst opinion. The Journal of Financial and Quantitative Analysis, 27(2), 169–183. https://doi.org/10.2307/2331366
   Web of Science ®Google Scholar
• Bartov, E., Givoly, D., & Hayn, C. (2002). The rewards to meeting or beating earnings expectations. Journal of Accounting and Economics, 33(2), 173–204. https://doi.org/10.1016/S0165-4101(02)00045-9
   Web of Science ®Google Scholar
• Benson, C., & Clay, E. (2004). Understanding the economic and financial impacts of natural disasters. Disaster risk management series No. 4. The World Bank, Washington, DC.
   Google Scholar
• Bhojraj, S., Lee, C. M., & Oler, D. K. (2003). What's my line? A comparison of industry classification schemes for capital market research. Journal of Accounting Research, 41(5), 745–774. https://doi.org/10.1046/j.1475-679X.2003.00122.x
   Web of Science ®Google Scholar
• Bloom, N. (2014). Fluctuations in uncertainty. Journal of Economic Perspectives, 28(2), 153–176. https://doi.org/10.1257/jep.28.2.153
   Web of Science ®Google Scholar
• Bourveau, T., & Law, K. K. (2021). Do disruptive life events affect how analysts assess risk? Evidence from deadly hurricanes. The Accounting Review, 96(3), 121–140. https://doi.org/10.2308/TAR-2016-0392
   Web of Science ®Google Scholar
• Bradshaw, M. T., Huang, A. G., & Tan, H. (2019). The effects of analyst-country institutions on biased research: Evidence from target prices. Journal of Accounting Research, 57(1), 85–120. https://doi.org/10.1111/1475-679X.12245
   Web of Science ®Google Scholar
• Brown, L. D., & Caylor, M. L. (2005). A temporal analysis of quarterly earnings thresholds: Propensities and valuation consequences. The Accounting Review, 80(2), 423–440. https://doi.org/10.2308/accr.2005.80.2.423
   Web of Science ®Google Scholar
• Byard, D., Hossain, M., & Mitra, S. (2007). US oil companies’ earnings management in response to hurricanes Katrina and Rita. Journal of Accounting and Public Policy, 26(6), 733–748. https://doi.org/10.1016/j.jaccpubpol.2007.10.006
   Google Scholar
• Carvalho, V. M., Nirei, M., Saito, Y. U., & Tahbaz-Salehi, A. (2021). Supply chain disruptions: Evidence from the great east Japan earthquake. The Quarterly Journal of Economics, 136(2), 1255–1321. https://doi.org/10.1093/qje/qjaa044
   Web of Science ®Google Scholar
• CEMHS. (2018). Spatial Hazard Events and Losses Database for the United States, Version 17.0. [Online Database]. Phoenix, AZ: Center for Emergency Management and Homeland Security, Arizona State University.
   Google Scholar
• Chenet, H., Ryan-Collins, J., & Van Lerven, F. (2021). Finance, climate-change and radical uncertainty: Towards a precautionary approach to financial policy. Ecological Economics, 183, 106957. https://doi.org/10.1016/j.ecolecon.2021.106957
   Google Scholar
• Chourou, L., Purda, L., & Saadi, S. (2021). Economic policy uncertainty and analysts’ forecast characteristics. Journal of Accounting and Public Policy, 40(4), 106775. https://doi.org/10.1016/j.jaccpubpol.2020.106775
   Web of Science ®Google Scholar
• Ciccone, S. (2003). Does analyst optimism about future earnings distort stock prices? Journal of Behavioral Finance, 4(2), 59–64. https://doi.org/10.1207/S15427579JPFM0402_02
   Google Scholar
• Clement, M. B. (1999). Analyst forecast accuracy: Do ability, resources, and portfolio complexity matter? Journal of Accounting and Economics, 27(3), 285–303. https://doi.org/10.1016/S0165-4101(99)00013-0
   Web of Science ®Google Scholar
• Clement, M. B., & Tse, S. Y. (2005). Financial analyst characteristics and herding behavior in forecasting. The Journal of Finance, 60(1), 307–341. https://doi.org/10.1111/j.1540-6261.2005.00731.x
   Web of Science ®Google Scholar
• Cutter, S. L., & Emrich, C. (2005). Are natural hazards and disaster losses in the U.S. increasing? EOS, Transactions American Geophysical Union, 86(41), 381–389. https://doi.org/10.1029/2005EO410001
   Google Scholar
• De Franco, G., Hope, O. K., Vyas, D., & Zhou, Y. (2015). Analyst report readability. Contemporary Accounting Research, 32(1), 76–104. https://doi.org/10.1111/1911-3846.12062
   Web of Science ®Google Scholar
• De Franco, G., Kothari, S. P., & Verdi, R. S. (2011). The benefits of financial statement comparability. Journal of Accounting Research, 49(4), 895–931. https://doi.org/10.1111/j.1475-679X.2011.00415.x
   Web of Science ®Google Scholar
• Dell, M., Jones, B. F., & Olken, B. A. (2012). Temperature shocks and economic growth: Evidence from the last half century. American Economic Journal: Macroeconomics, 4(3), 66–95. https://doi.org/10.1257/mac.4.3.66
   Web of Science ®Google Scholar
• Dichev, I. D., & Tang, V. W. (2009). Earnings volatility and earnings predictability. Journal of Accounting and Economics, 47(1-2), 160–181. https://doi.org/10.1016/j.jacceco.2008.09.005
   Web of Science ®Google Scholar
• Ding, R., Liu, M., Wang, T., & Wu, Z. (2021). The impact of climate risk on earnings management: International evidence. Journal of Accounting and Public Policy, 40(2), 106818. https://doi.org/10.1016/j.jaccpubpol.2021.106818
   Web of Science ®Google Scholar
• Duru, A., & Reeb, D. M. (2002). International diversification and analysts’ forecast accuracy and bias. The Accounting Review, 77(2), 415–433. https://doi.org/10.2308/accr.2002.77.2.415
   Web of Science ®Google Scholar
• Eckstein, D., Lena Hutfils, M., & Winges, M. (2019). Global climate risk index 2019. Germanwatch.
   Google Scholar
• Felbermayr, G., & Gröschl, J. (2014). Naturally negative: The growth effects of natural disasters. Journal of Development Economics, 111, 92–106. https://doi.org/10.1016/j.jdeveco.2014.07.004
   Web of Science ®Google Scholar
• Gall, M., Borden, K. A., & Cutter, S. L. (2009). When do losses count? Six fallacies of natural hazards loss data. Bulletin of the American Meteorological Society, 90(6), 799–810. https://doi.org/10.1175/2008BAMS2721.1
   Web of Science ®Google Scholar
• Gallagher, J., & Hartley, D. (2017). Household finance after a natural disaster: The case of Hurricane Katrina. American Economic Journal: Economic Policy, 9(3), 199–228. https://doi.org/10.1257/pol.20140273
   Web of Science ®Google Scholar
• Gao, M., Leung, H., & Qiu, B. (2021). Organization capital and executive performance incentives. Journal of Banking & Finance, 123, 106017. https://doi.org/10.1016/j.jbankfin.2020.106017
   Web of Science ®Google Scholar
• Groysberg, B., & Healy, P. M. (2013). Wall Street research: Past, present, and future. Stanford University Press.
   Google Scholar
• Groysberg, B., Healy, P. M., & Maber, D. A. (2011). What drives sell-side analyst compensation at high-status investment banks? Journal of Accounting Research, 49(4), 969–1000. https://doi.org/10.1111/j.1475-679X.2011.00417.x
   Web of Science ®Google Scholar
• Han, Y., Mao, C. X., Tan, H., & Zhang, C. (2020). Distracted analysts: Evidence from climatic disasters. Fox School of Business Research Paper.
   Google Scholar
• Hann, R. N., Ogneva, M., & Sapriza, H. (2012). Forecasting the macroeconomy: Analysts versus economists. Available at SSRN 2194179.
   Google Scholar
• Harford, J., Jiang, F., Wang, R., & Xie, F. (2019). Analyst career concerns, effort allocation, and firms’ information environment. The Review of Financial Studies, 32(6), 2179–2224. https://doi.org/10.1093/rfs/hhy101
   Web of Science ®Google Scholar
• Hayes, R. M. (1998). The impact of trading commission incentives on analysts’ stock coverage decisions and earnings forecasts. Journal of Accounting Research, 36(2), 299–320. https://doi.org/10.2307/2491479
   Web of Science ®Google Scholar
• Heal, G., & Millner, A. (2014). Reflections: Uncertainty and decision making in climate change economics. Review of Environmental Economics and Policy, 8(1), 120–137. https://doi.org/10.1093/reep/ret023
   Web of Science ®Google Scholar
• Healy, P. M., Hutton, A. P., & Palepu, K. G. (1999). Stock performance and intermediation changes surrounding sustained increases in disclosure. Contemporary Accounting Research, 16(3), 485–520. https://doi.org/10.1111/j.1911-3846.1999.tb00592.x
   Google Scholar
• Hodges, J., Leatherby, L., & Mehrota, K. (2018). Climate change warriors’ latest weapon of choice is litigation. Bloomberg, May 24. https://www.bloomberg.com/graphics/2018-climate-change-lawsuits/.
   Google Scholar
• Hong, H., & Kubik, J. D. (2003). Analyzing the analysts: Career concerns and biased earnings forecasts. The Journal of Finance, 58(1), 313–351. https://doi.org/10.1111/1540-6261.00526
   Web of Science ®Google Scholar
• Hope, O. K., & Kang, T. (2005). The association between macroeconomic uncertainty and analysts’ forecast accuracy. Journal of International Accounting Research, 4(1), 23–38. https://doi.org/10.2308/jiar.2005.4.1.23
   Google Scholar
• Hong, H., Li, F. W., & Xu, J. (2019). Climate risks and market efficiency. Journal of Econometrics, 208(1), 265–281. https://doi.org/10.1016/j.jeconom.2018.09.015
   Google Scholar
• Hsiang, S., Kopp, R., Jina, A., Rising, J., Delgado, M., Mohan, S., & Larsen, K. (2017). Estimating economic damage from climate change in the United States. Science, 356(6345), 1362–1369. https://doi.org/10.1126/science.aal4369
   PubMed Web of Science ®Google Scholar
• Hsu, P. H., Lee, H. H., Peng, S. C., & Yi, L. (2018). Natural disasters, technology diversity, and operating performance. The Review of Economics and Statistics, 100(4), 619–630. https://doi.org/10.1162/rest_a_00738
   Web of Science ®Google Scholar
• Huang, H. H., Kerstein, J., & Wang, C. (2018). The impact of climate risk on firm performance and financing choices: An international comparison. Journal of International Business Studies, 49(5), 633–656. https://doi.org/10.1057/s41267-017-0125-5
   Web of Science ®Google Scholar
• Hugon, A., & Muslu, V. (2010). Market demand for conservative analysts. Journal of Accounting and Economics, 50(1), 42–57. https://doi.org/10.1016/j.jacceco.2010.01.001
   Web of Science ®Google Scholar
• Intergovernmental Panel on Climate Change (IPCC). (2008). Climate change 2007: Synthesis report. Intergovernmental Panel on Climate Change.
   Google Scholar
• Irvine, P. J. (2000). Do analysts generate trade for their firms? Evidence from the Toronto stock exchange. Journal of Accounting and Economics, 30(2), 209–226. https://doi.org/10.1016/S0165-4101(01)00005-2
   Web of Science ®Google Scholar
• Jackson, A. R. (2005). Trade generation, reputation, and sell-side analysts. The Journal of Finance, 60(2), 673–717. https://doi.org/10.1111/j.1540-6261.2005.00743.x
   Web of Science ®Google Scholar
• Jurado, K., Ludvigson, S. C., & Ng, S. (2015). Measuring uncertainty. American Economic Review, 105(3), 1177–1216. https://doi.org/10.1257/aer.20131193
   Web of Science ®Google Scholar
• Kahneman, D. (1973). Attention and effort (Vol. 1063). Prentice-Hall.
   Google Scholar
• Kahneman, D., & Tversky, A. (1979). Prospect theory: An analysis of decision under risk. Econometrica, 47(2), 263–291. https://doi.org/10.2307/1914185
   Web of Science ®Google Scholar
• Kanagaretnam, K., Lobo, G., & Zhang, L. (2022). Relationship between climate risk and physical and organizational capital. Management International Review, 62(2), 245–283. https://doi.org/10.1007/s11575-022-00467-0
   Web of Science ®Google Scholar
• Keskek, S., & Tse, S. Y. (2018). Does forecast bias affect financial analysts’ market influence? Journal of Accounting, Auditing & Finance, 33(4), 601–623. https://doi.org/10.1177/0148558X16665965
   Google Scholar
• Klomp, J. (2017). Flooded with debt. Journal of International Money and Finance, 73, 93–103. https://doi.org/10.1016/j.jimonfin.2017.01.006
   Web of Science ®Google Scholar
• Kong, D., Lin, Z., Wang, Y., & Xiang, J. (2021). Natural disasters and analysts’ earnings forecasts. Journal of Corporate Finance, 66, 101860. https://doi.org/10.1016/j.jcorpfin.2020.101860
   Web of Science ®Google Scholar
• Kozeniauskas, N., Orlik, A., & Veldkamp, L. (2018). What are uncertainty shocks? Journal of Monetary Economics, 100, 1–15. https://doi.org/10.1016/j.jmoneco.2018.06.004
   Web of Science ®Google Scholar
• Krueger, P., Sautner, Z., & Starks, L. T. (2020). The importance of climate risks for institutional investors. The Review of Financial Studies, 33(3), 1067–1111. https://doi.org/10.1093/rfs/hhz137
   Web of Science ®Google Scholar
• Lang, M. H., & Lundholm, R. J. (1996). Corporate disclosure policy and analyst behavior. The Accounting Review, 71(4), 467–492.
   Web of Science ®Google Scholar
• Laws, E., & Prideaux, B. (2006). Crisis management: A suggested typology. Journal of Travel & Tourism Marketing, 19(2-3), 1–8. https://doi.org/10.1300/J073v19n02_01
   Google Scholar
• Lehmer, T., Lourie, B., & Shanthikumar, D. (2022). Brokerage trading volume and analysts’ earnings forecasts: A conflict of interest? Review of Accounting Studies, 27(2), 441–476. https://doi.org/10.1007/s11142-021-09619-3
   Web of Science ®Google Scholar
• Leuz, C., & Wysocki, P. D. (2016). The economics of disclosure and financial reporting regulation: Evidence and suggestions for future research. Journal of Accounting Research, 54(2), 525–622. https://doi.org/10.1111/1475-679X.12115
   Web of Science ®Google Scholar
• Li, Z., Wong, T. J., & Yu, G. (2020). Information dissemination through embedded financial analysts: Evidence from China. The Accounting Review, 95(2), 257–281. https://doi.org/10.2308/accr-52521
   Web of Science ®Google Scholar
• Lim, T. (2001). Rationality and analysts’ forecast bias. The Journal of Finance, 56(1), 369–385. https://doi.org/10.1111/0022-1082.00329
   Web of Science ®Google Scholar
• Loayza, N. V., Olaberria, E., Rigolini, J., & Christiaensen, L. (2012). Natural disasters and growth: Going beyond the averages. World Development, 40(7), 1317–1336. https://doi.org/10.1016/j.worlddev.2012.03.002
   Web of Science ®Google Scholar
• Loh, R. K., & Stulz, R. M. (2018). Is sell-side research more valuable in bad times? The Journal of Finance, 73(3), 959–1013. https://doi.org/10.1111/jofi.12611
   Web of Science ®Google Scholar
• Lopez, T. J., & Rees, L. (2002). The effect of beating and missing analysts’ forecasts on the information content of unexpected earnings. Journal of Accounting, Auditing & Finance, 17(2), 155–184. https://doi.org/10.1177/0148558X0201700204
   Google Scholar
• Mattei, M. M., & Platikanova, P. (2017). Do product market threats affect analyst forecast precision? Review of Accounting Studies, 22(4), 1628–1665. https://doi.org/10.1007/s11142-017-9415-1
   Web of Science ®Google Scholar
• Miao, Q., Hou, Y., & Abrigo, M. R. (2018). Measuring the financial shocks of natural disasters: A panel study of US states. National Tax Journal, 71(1), 11–44. https://doi.org/10.17310/ntj.2018.1.01
   Web of Science ®Google Scholar
• Mikhail, M. B., Walther, B. R., & Willis, R. H. (1999). Does forecast accuracy matter to security analysts? The Accounting Review, 74(2), 185–200. https://doi.org/10.2308/accr.1999.74.2.185
   Web of Science ®Google Scholar
• Murphy, C., & Smith, R. (2015). Is a financial analyst job the right direction for you? Financial Times (June 28). Available at https://www.ft.com/content/17f44d8e-101c-11e5-ad5a-00144feabdc0.
   Google Scholar
• Nagar, V., Schoenfeld, J., & Wellman, L. (2019). The effect of economic policy uncertainty on investor information asymmetry and management disclosures. Journal of Accounting and Economics, 67(1), 36–57. https://doi.org/10.1016/j.jacceco.2018.08.011
   Web of Science ®Google Scholar
• Ng, J., Saffar, W., & Zhang, J. J. (2020). Policy uncertainty and loan loss provisions in the banking industry. Review of Accounting Studies, 25(2), 726–777. https://doi.org/10.1007/s11142-019-09530-y
   Web of Science ®Google Scholar
• Noy, I. (2009). The macroeconomic consequences of disasters. Journal of Development Economics, 88(2), 221–231. https://doi.org/10.1016/j.jdeveco.2008.02.005
   Web of Science ®Google Scholar
• Oh, C. H., & Oetzel, J. (2022). Multinational enterprises and natural disasters: Challenges and opportunities for IB research. Journal of International Business Studies, 53(2), 231–254. https://doi.org/10.1057/s41267-021-00483-6
   PubMed Web of Science ®Google Scholar
• Park, Y., Hong, P., & Roh, J. J. (2013). Supply chain lessons from the catastrophic natural disaster in Japan. Business Horizons, 56(1), 75–85. https://doi.org/10.1016/j.bushor.2012.09.008
   Web of Science ®Google Scholar
• Plumlee, M. A. (2003). The effect of information complexity on analysts’ use of that information. The Accounting Review, 78(1), 275–296. https://doi.org/10.2308/accr.2003.78.1.275
   Web of Science ®Google Scholar
• Raddatz, C. (2006). Are external shocks responsible for the instability of output in low-income countries? Journal of Development Economics, 1(84), 155–187.
   Google Scholar
• Rauch, E. (2012). Global natural catastrophe update. In C. Hedde (Ed.), In 2011 natural catastrophe year in review (pp. 27–43). Munich Reinsurance America.
   Google Scholar
• Richardson, V. J. (2000). Information asymmetry and earnings management: Some evidence. Review of Quantitative Finance and Accounting, 15(4), 325–347. https://doi.org/10.1023/A:1012098407706
   Google Scholar
• Rosselló, J., Becken, S., & Santana-Gallego, M. (2020). The effects of natural disasters on international tourism: A global analysis. Tourism Management, 79, 104080. https://doi.org/10.1016/j.tourman.2020.104080
   PubMed Web of Science ®Google Scholar
• Skidmore, M., & Toya, H. (2002). Do natural disasters promote long-run growth? Economic Inquiry, 40(4), 664–687. https://doi.org/10.1093/ei/40.4.664
   Web of Science ®Google Scholar
• Skinner, D. J., & Sloan, R. G. (2002). Earnings surprises, growth expectations, and stock returns or don't let an earnings torpedo sink your portfolio. Review of Accounting Studies, 7(2-3), 289–312. https://doi.org/10.1023/A:1020294523516
   Google Scholar
• Stickel, S. E. (1990). Predicting individual analyst earnings forecasts. Journal of Accounting Research, 28(2), 409–417. https://doi.org/10.2307/2491158
   Web of Science ®Google Scholar
• Stickel, S. E. (1992). Reputation and performance among security analysts. The Journal of Finance, 47(5), 1811–1836. https://doi.org/10.1111/j.1540-6261.1992.tb04684.x
   Web of Science ®Google Scholar
• Walther, B. R., & Willis, R. H. (2013). Do investor expectations affect sell-side analysts’ forecast bias and forecast accuracy? Review of Accounting Studies, 18(1), 207–227. https://doi.org/10.1007/s11142-012-9204-9
   Web of Science ®Google Scholar
• Welch, I. (2000). Herding among security analysts. Journal of Financial Economics, 58(3), 369–396. https://doi.org/10.1016/S0304-405X(00)00076-3
   Web of Science ®Google Scholar
• World Economic Forum. (2020). The Global Risks Report 2020 https://www.weforum.org/reports/the-global-risks-report-2020.
   Google Scholar
• Zhang, X. F. (2006). Information uncertainty and analyst forecast behavior. Contemporary Accounting Research, 23(2), 565–590. https://doi.org/10.1506/92CB-P8G9-2A31-PV0R
   Web of Science ®Google Scholar