There’s a funny thing about facts. Two people can look at the same ones but interpret them very differently, depending on their styles of thinking.
On Wall Street, analysts with short-term or long-term orientations may issue different financial forecasts for the same company, says Yong Yu , professor of accounting at the McCombs School of Business at The University of Texas at Austin.
In new research with Shuping Chen , professor of accounting at Texas McCombs, Yu finds those differences are partly cultural, depending on analysts’ cultures of origin. Analysts whose inferred ancestral cultures place greater emphasis on long-term orientation make more and better long-term earnings predictions. Their stock picks average 0.30% higher monthly returns than those of analysts from less long-term-oriented cultural backgrounds.
The researchers define long-term forecasts as more than one year ahead and short-term as one year or less.
Financial markets often focus “on near-term performance rather than the long-term value creation, which could be a myopic kind of behavior,” he says. “Our findings suggest that incorporating longer-horizon thinking can help investors develop a more complete view of a firm’s prospects.”
Accounting for Culture
By culture, Yu means “inherited culture through the family,” he says. Specifically, he’s interested in a culture’s stress on long-term planning — or lack of it.
“They are willing to give up the short-term performance or short-term interest in exchange for the long run,” he says.
With Jay Jung of City St George’s, University of London, and Sonya Lim of DePaul University, Yu and Chen looked at surnames for 3,797 U.S. analysts from 2000 to 2014.
They used multiple sources to link surnames to likely countries of origin, including historical immigration data and the Onomap database, which uses telephone directories and electoral registers. They also separated first-generation immigrants, who were more likely to reflect their cultures of origin, from later generations.
They scored each analyst’s origins for long-term orientation, based on surveys by social psychologist Geert Hofstede . Finally, they compared each analyst’s cultural score with the time horizons of their financial forecasts. They found that analysts with high long-term orientations:
Their stock picks also turned out to be superior. They beat expected returns by 0.61% a month, compared with 0.31% per month for analysts from less long-term-oriented cultural backgrounds. Their recommendations were even more profitable for companies whose balance sheets had many intangibles or whose long-term prospects were hard to evaluate.
The findings are consistent with the study’s thesis that cultural backgrounds can shape how people think about time horizons, Yu says. Some cultures place greater emphasis on planning for the future, which may influence how analysts approach long-term information.
Aiding Investors
Long-term orientations came out in other ways, as well. In transcripts of earnings calls, those analysts were more likely to “prompt the manager to disclose more long-term information,” Yu says. That helps other investors, he adds.
When it came to short-term predictions, those analysts were as accurate as their peers. That suggests their long-term forecasts were especially valuable to investors.
Such thinking may be particularly useful for covering companies whose value depends heavily on long-term prospects, Yu says — such as growth-oriented, innovation-intensive, or high-uncertainty companies. Brokerage houses and investment banks should value teams that bring both short- and long-term perspectives.
The study also points to the broader value of analytical and cultural diversity in financial markets, he adds. In markets that often reward near-term results, analysts who especially attend to long-term information can add a complementary perspective.
“We need both the short-term and the long-term prospects in the market,” he advises. “That way, you will have a more accurate, comprehensive picture of a firm’s value.”
“ Analysts’ Cultural Long-Term Orientation and Their Information Production ” is published in Contemporary Accounting Research.
Contemporary Accounting Research
Analysts' Cultural Long-Term Orientation and Their Information Production
20-May-2026