Career concerns of banking analysts

• 成果类型: Article
• 署名作者: Horton, Joanne; Serafeim, George; Wu, Shan
• 署名单位: University of Exeter; Harvard University; China Europe International Business School
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2017.03.003
• 发表日期: 2017
• 关键词: BIASED EARNINGS FORECASTS; REVOLVING-DOOR; accuracy; expectations; INFORMATION; incentives; MARKET; FIRMS; RISK; recommendations

摘要

We study how career concerns influence banking analysts' forecasts. Banking analysts' first (last) earnings forecast of the year is relatively more optimistic (pessimistic) for a bank that could be their future employer. This pattern is not observed when the same analysts forecast earnings of banks unlikely to be their future employer. We use the Global Settlement as an exogenous shock on career concerns and show that this forecast pattern is more pronounced after the Settlement. Moreover, we find evidence that analysts benefit from this behavior as analysts that are more biased in their forecasts of potential future employers are more likely to move to a higher reputation bank. (C) 2017 Elsevier B.V. All rights reserved.