The Integrity of Financial Analysts: Evidence from Asymmetric Responses to Earnings Surprises

doi:10.1007/s10551-016-3244-1

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	The Integrity of Financial Analysts: Evidence from Asymmetric Responses to Earnings Surprises
	Lu, Rui 1; Hou, Wenxuan 2,3; Oppenheimer, Henry 4; Zhang, Ting 5
刊名	JOURNAL OF BUSINESS ETHICS
	2018-09
卷号	151 期号:3 页码:761-783
关键词	Integrity Analysts' response Conflicts of interest Earnings surprises
ISSN号	0167-4544
DOI	10.1007/s10551-016-3244-1
英文摘要	This paper investigates the integrity of financial analysts by examining their recommendation responses to large quarterly earnings surprises. Although there is no significant difference in recommendation changes between affiliated and unaffiliated analysts in response to positive earnings surprises, affiliated analysts are more reluctant than unaffiliated analysts to downgrade stock recommendations in response to negative earnings surprises. The evidence implies that conflicts of interest undermine the integrity of financial analysts. We further examine the effects of reputation concern and the Global Research Analyst Settlement as informal and formal mechanisms, on restoring analysts' integrity. The results show that the positive bias in recommendations remains prevalent for affiliated analysts from reputable investment banks and for the postreform period. Finally, evidence from market reactions suggests that investors fail to notice that analysts' integrity is compromised by conflicts of interest and are misled by affiliated analysts.
WOS研究方向	Business & Economics ; Social Sciences - Other Topics
语种	英语
出版者	SPRINGER
WOS记录号	WOS:000442213400010
内容类型	期刊论文
源URL	[http://10.2.47.112/handle/2XS4QKH4/526]
专题	上海财经大学
通讯作者	Hou, Wenxuan
作者单位	1.Sun Yat Sen Univ, Lingnan Univ Coll, Guangzhou 510275, Guangdong, Peoples R China; 2.Univ Edinburgh, Business Sch, 29 Buccleuch Pl, Edinburgh EH8 9JS, Midlothian, Scotland; 3.Shanghai Univ Finance & Econ, Int Finance Ctr, Shanghai Inst, Shanghai, Peoples R China; 4.Univ Rhode Isl, Coll Business Adm, Kingston, RI 02881 USA; 5.Univ Dayton, Sch Business Adm, Dayton, OH 45469 USA
推荐引用方式 GB/T 7714	Lu, Rui,Hou, Wenxuan,Oppenheimer, Henry,et al. The Integrity of Financial Analysts: Evidence from Asymmetric Responses to Earnings Surprises[J]. JOURNAL OF BUSINESS ETHICS,2018,151(3):761-783.
APA	Lu, Rui,Hou, Wenxuan,Oppenheimer, Henry,&Zhang, Ting.(2018).The Integrity of Financial Analysts: Evidence from Asymmetric Responses to Earnings Surprises.JOURNAL OF BUSINESS ETHICS,151(3),761-783.
MLA	Lu, Rui,et al."The Integrity of Financial Analysts: Evidence from Asymmetric Responses to Earnings Surprises".JOURNAL OF BUSINESS ETHICS 151.3(2018):761-783.