The Effect of Innovation Performance on Financial Analyst Forecasts in KOSDAQ
Asian Tax Journal Vol. 25 No. 1 (2024), pp. 107-128
Abstract
As the economic situation begins to improve after COVID－19, interest in job creation and economic recovery is increasing. Accordingly, this study aims to verify how information users evaluate high－growth firms that show high growth in sales and employment. High－growth firms that create innovation performance can be highly desirable for investment due to their rapid growth rate and high performance reports. Additionally, investors become interested in highgrowth firms that show innovative performance. Investors demand information, and financial analysts announce forecasts for high－growth firms based on these investors’ demands. Therefore, verifying the relationship between high－growth firms and financial analyst forecasts can provide an opportunity to determine how users of external information reflect innovation performance in investment decisions. We also examined whether intangible assets affect financial analyst forecasts of high－growth firms. The sample firms are those listed on the KOSDAQ from 2011 to 2019, and the proxy for innovation performance was measured by whether or not they were selected as high－growth firms announced by the STEPI. As a result of analyzing the effect of the selection of high－growth firms and intangible assets on financial analysts forecasts, the forecast bias of financial analysts for high－growth firms was small and accuracy was high. It was confirmed that in high－growth firms, the intangible assets in high－growth firms, the greater the forecast bias and the lower the accuracy. These analysis results indicate that investors interested in high－growth firms should make decisions by considering the feasibility of research and development activities.
Keywords
- High－growth firms
- Innovation performance
- Intangible assets
- Financial analyst forecasts
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