Political contributions and analyst behavior

• 成果类型: Article
• 署名作者: Jiang, Danling; Kumar, Alok; Law, Kelvin K. F.
• 署名单位: State University System of Florida; Florida State University; University of Miami; Tilburg University
• 刊物名称: REVIEW OF ACCOUNTING STUDIES
• ISSN/ISSBN: 1380-6653
• DOI: 10.1007/s11142-015-9344-9
• 发表日期: 2016
• 页码: 37-88
• 关键词: FORECAST REVISIONS; EARNINGS FORECASTS; career concerns; conservatism; Managers; personality; performance; accuracy; style; expectations

摘要

We show that the personal traits of analysts, as revealed by their political donations, influence their forecasting behavior and stock prices. Analysts who contribute primarily to the Republican Party adopt a more conservative forecasting style. Their earnings forecast revisions are less likely to deviate from the forecasts of other analysts and are less likely to be bold. Their stock recommendations also contain more modest upgrades and downgrades. Overall, these analysts produce better quality research, which is recognized and rewarded by their employers, institutional investors, and the media. Stock market participants, however, do not fully recognize their superior ability as the market reaction following revisions by these analysts is weaker.