The Relationship between Firm Level Corporate Governance and the Performance of Financial Analysts
Christopher von Koch

Abstract
Present study investigates the relationship between firm level corporate governance and the performance of financial analysts. By using a comprehensive database the analysis integrates several dimensions of firm level corporate governance as well as the dimension legal context. The result show support for a positive relationship between corporate governance and financial analyst performance. However, based on the fact that the sample is divided into companies belonging to civil law and common law countries, this conclusion must be nuanced. We can conclude that there is just support for a positive relation between firm-level corporate governance and forecast accuracy in civil law countries, and only support for a negative relation between firm-level corporate governance and forecast dispersion in common law countries. However, all firms with strong corporate governance in the two different contexts have a greater analyst following. Furthermore, we find that the variables related to the board seem to matter independently of the context concerning the improved performance of the analyst. In addition, in both civil and common law countries, the higher improved function of the board and ownership increases the demand for analysts, while improved audit function as well as improved takeover regulation lessen the demand for analysts.

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