The accounting literature has traditionally focused on firm-level studies to examine the capital market implications of earnings and other accounting variables. We first develop the arguments for studying capital market implications at the aggregate level as well. A central issue is that...

A principal-components analysis demonstrates that common earnings factors explain a substantial portion of rm-level earnings variation, implying earnings shocks have substantial systematic components and are not almost fully diversifiable as prior literature has concluded. Furthermore, the...

This paper examines whether analysts have an industry-level information advantage over managers when forecasting earnings. We argue that such an advantage is more likely to exist in industries where firm performance is more sensitive to industry-level external economic forces. We find that for...