The aim of this paper is to investigate the perspective of signaling theory,influence the adoption of differentiated practices of corporate governance on the accuracy of consensus (average forecast earnings) forecasts of analysts of the Brazilian market. We investigated this relationship because of the lack of a well-developed theory about the complex and multidimensional nature of corporate governance. The accuracy of analyst’s forecasts was measured from the proposed methodologies in national and international literature. As a proxy for adoption of differentiated corporate governance practices were used in different levels of corporate governance BM&FBovespa (Level 1, Level 2 and New Market). A working sample of the research was composed of 105 public companies with shares traded on the Stock Exchange of São Paulo who had regular coverage of industry analysts, over the period 2000 to 2008. We considered both financial institutions and non-financial, totaling 2352 observations. According to the results, there is evidence that corporate governance positively influences the accuracy of the forecasts of analysts. Thus, one can consider that the adoption of differentiated practices of corporate governance is a positive sign, issued by companies to the capital market, capable of influencing the accuracy of consensus forecasts of analysts of the Brazilian market, and that this signal represents the change in the parameters that define the conditional probability beliefs, both analysts in preparing their forecasts and recommendations for investors in choosing their investments. It is our understanding that this work contributes not only to the national and international literature as far as corporate governance and analysts’ forecasts go, but also to the Brazilian capital market (analysts, investors, auditors, banks, investment institutions, rating agencies, pension funds, regulatory bodies, associations, stock exchange, companies themselves, managers, among others) when it shows the direct and indirect benefits of the adoption of distinctive practices of corporate governance by Brazilian companies.
Corporate governance; Accuracy; Forecasts; Analysts; Signaling
