Abstract: This paper theoretically analyzes and empirically tests the influence of social trust on analysts’ earnings forecasts and its mechanism. Using the data of China’s A-share listed non-financial companies from 2007 to 2018, we find that social trust can significantly improve the accuracy of analyst earnings forecasts and reduce the dispersion of forecasts. The improvement effect of social trust on analysts’ earnings forecasts mainly exists in the environment of more perfect legal system or lower market competition. Further research finds that social trust significantly improves the transparency of accounting information and the stability of earnings, and both of them have an important mediating effect between social trust and analysts’ earnings forecast. This paper enriches and expands the research on factors affecting analyst earnings forecast from the perspective of social trust. At the same time, it helps to expand and deepen the research on social trust from the perspective of analysts' earnings forecasts. It also shows that, while promoting the construction of the rule of law, the government should also vigorously strengthen integrity construction and cultivate a better social trust environment to promote the high-quality development of the capital market.

Key words: social trust, analysts’ earnings forecasts, information quality, legal environment, market competition