Corporate culture and analyst catering

• 成果类型: Article
• 署名作者: Pacelli, Joseph
• 署名单位: Indiana University System; Indiana University Bloomington; IU Kelley School of Business
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2018.08.017
• 发表日期: 2019
• 关键词: CONFLICTS-OF-INTEREST; FORECAST ACCURACY; corruption culture; EARNINGS FORECASTS; GLOBAL SETTLEMENT; Tax avoidance; performance; BIAS; profitability; INDEPENDENCE

摘要

This study examines the relation between financial institutions' corporate culture and the quality of analysts' research services. Using data collected from the Financial Industry Regulatory Authority, I measure the weakness of financial institutions' corporate culture based on violations observed in securities activities unrelated to equity research. I find evidence demonstrating an association between weak corporate culture and analysts' providing research products catered to institutional clients at the expense of individual investors. Specifically, FINRA violations are associated with both (i) less accurate forecasts and less informative reports, and (ii) higher institutional commission revenues and more broker-hosted conferences for select institutional clients.