Conflict of interest and the credibility of underwriter analyst recommendations

• 成果类型: Article
• 署名作者: Michaely, R; Womack, KL
• 署名单位: Cornell University; Dartmouth College
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/12.4.653
• 发表日期: 1999
• 页码: 653
• 关键词: initial public offerings; performance; selection

摘要

Brokerage analysts frequently comment on and sometimes recommend companies that their firms have recently taken public. We show that stocks that underwriter analysts recommend perform more poorly than buy recommendations by unaffiliated brokers prior to, at the time of and subsequent to the recommendation date. We conclude that the recommendations by underwriter analysts show significant evidence of bias. We show also that the market does not recognize the full extent of this bias. The results suggest a potential conflict of interest inherent in the different functions that investment bankers perform.