Electronic Markets

, Volume 24, Issue 1, pp 47–55 | Cite as

The impact of early XBRL adoption on analysts’ forecast accuracy - empirical evidence from China

  • Chunhui LiuEmail author
  • Lee Jian Yao
  • Choon Ling Sia
  • Kwok Kee Wei
General Research


Developing common standards, such as eXtensible Business Reporting Language (XBRL), to smoothen information sharing in the value chain is considered the leading issue for releasing the potential of e-business. Data standards such as XBRL play a critical role in an increasingly networked environment. Despite promises of XBRL to improve data accuracy, few empirical studies have tested the impact of early XBRL adoption on the quality of information. Theories explaining information technology (IT) productivity paradox indicate that value realization from IT innovations may experience time lag due to the need for technology refinement and diffusion. This study examines the impact of early adoption of XBRL on analysts’ forecast accuracy with empirical data of Chinese firms. The uncertainty related to the unproven technology, such as information errors, has decreased analysts’ forecast accuracy during the early adoption period among firms in an economy with little public information on listed firms. Our findings have practical implications that will facilitate the quality improvement of financial information in a networked business environment. Our findings highlight the importance of quality assurance and policy enforcement for value realization from XBRL adoption to regulators, filers, information consumers, the accounting profession and other stakeholders.


XBRL adoption Innovation diffusion e-Business IT business value Online financial reporting 

JEL classification

M150 M410 O330 



The authors are indebted to Dr. Xin Luo, anonymous reviewers and senior editors for their enlightening comments and helpful suggestions. The authors also thank the participants of the Annual Conference on Global Economy, Business and Finance 2012.

A dedication

The authors hope to dedicate this paper to Dr. Lee J. Yao who passed away on Nov. 14, 2012 due to complications from cancer.


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Copyright information

© Institute of Information Management, University of St. Gallen 2013

Authors and Affiliations

  • Chunhui Liu
    • 1
    Email author
  • Lee Jian Yao
    • 2
  • Choon Ling Sia
    • 3
  • Kwok Kee Wei
    • 3
  1. 1.Department of Business and AdministrationThe University of WinnipegWinnipegCanada
  2. 2.J. A. Butt College of BusinessLoyala University New OrleansNew OrleansUSA
  3. 3.Department of Information SystemsThe City University of Hong KongKowloonHong Kong SAR

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