An Analysis of the Relationship between Corporate Social Responsibility and Analyst EPS Forecasts

Abstract

This study chooses and identifies enterprises from among the Taiwan 50 Index which have been selected for entry into the DJSI–Emerging Markets as the experimental group, and enterprises that have never been selected as the control group. By dividing the Taiwan 50 Index into a “group of consecutively selected enterprises” and a “group of enterprises never selected”, the study explores changes in the EPS forecasts by analysts about both groups from 2013 to 2019.Then, this study explores the connection betweenan enterprise’s consecutive selection for entry into the DJSI–Emerging Markets, the number of analyst followers, and the analysts’ EPS forecast accuracy.The empirical results demonstrate that no significantly positive and optimistic changes in the analysts’ EPS forecasts of the “group of consecutively selected enterprises”. Next, this study also found that when analysts may not be able to provide precise forecasts of enterprises all the times.Finally, this study found that it appears that even if an enterprise is followed by more analysts making forecasts, the analysts’ forecast accuracy remains unaffected.