Purpose This research aims to test how marital co-governance affects analysts’ earnings forecast accuracy (AEFA) as well as the channels and scenario conditions between the two. Design/methodology/approach The authors use a sample of A-share listed family firms with marital co-governance from 2008 to 2024 to explore how marital co-governance affects AEFA by employing the ordinary least squares (OLS) method. Moreover, we adopt the Heckman two-step, two-stage least squares (2SLS), system generalized method of moments (SYS-GMM), and omitted variables approaches to address endogeneity issues. Findings The results reveal that marital co-governance enhances AEFA and reduces analysts’ forecast error and dispersion. Channel tests show that marital co-governance enhances AEFA by improving internal controls, reducing earnings volatility, and enhancing environmental, social and governance (ESG) ratings. Cross-sectional tests reveal that the enhancing effect of marital co-governance on AEFA is more prominent for family firms with high corporate governance levels, an absence of in-law involvement in management, intense industry competition, and high levels of social trust. Originality/value This study contributes to the literature on the determinants of AEFA from the perspective of marital co-governance and to studies of the economic consequences of marital co-governance. This research further reveals the channels and scenario conditions between marital co-governance and AEFA and explores the impact of “couple store” family firms on AEFA by providing novel insights into the decision-making patterns and financial behavior of family firms from a broader perspective.
Zheng et al. (Fri,) studied this question.