Mixed-gender analyst team and accuracy of earnings forecast: evidence from China

Abstract

ABSTRACT We examine the effect of analyst teams’ gender diversity on the accuracy of their earnings forecasts. We find that, compared with single-gender analyst teams, mixed-gender analyst teams generate more accurate earnings forecasts and have less optimism bias. The desirable effect of mixed-gender analyst teams on the accuracy of earnings forecasts is more significant in the highly educated or experienced analyst teams, in smaller brokerages with fewer star analysts, and in firms audited by non-Big -Four accounting firms or with less analyst coverage. Further studies find that, female analysts who work in teams produce more accurate earnings forecasts than they work individually. In addition, when a single-gender analyst team transforms into a mixed-gender analyst team, its reports have more accuracy and less optimism bias than before, and vice versa.