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Political contributions and analyst behavior

Jiang, Danling, Kumar, Alok and Law, Kelvin K. F. 2016, Political contributions and analyst behavior, Review of accounting studies, vol. 21, no. 1, pp. 37-88, doi: 10.1007/s11142-015-9344-9.

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Title Political contributions and analyst behavior
Author(s) Jiang, Danling
Kumar, Alok
Law, Kelvin K. F.
Journal name Review of accounting studies
Volume number 21
Issue number 1
Start page 37
End page 88
Total pages 52
Publisher Springer
Place of publication New York, N.Y.
Publication date 2016-03
ISSN 1380-6653
1573-7136
Keyword(s) equity analysts
political contribution
conservative analysts
forecasting style
market reaction
Summary 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.
Language eng
DOI 10.1007/s11142-015-9344-9
Field of Research 1501 Accounting, Auditing And Accountability
Socio Economic Objective 0 Not Applicable
HERDC Research category C1.1 Refereed article in a scholarly journal
Copyright notice ©2015, Springer
Persistent URL http://hdl.handle.net/10536/DRO/DU:30092551

Document type: Journal Article
Collections: Faculty of Business and Law
Department of Finance
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