Do Analyst Conflicts Matter? Evidence from Stock Recommendations
研究分析师因投资银行和经纪业务产生的利益冲突是否导致其发布乐观股票推荐，以及投资者是否被误导。发现冲突确实与推荐水平正相关，但市场能识别并适当折扣这些偏见。
We examine whether conflicts of interest with investment banking and brokerage businesses induce sell-side analysts to issue optimistic stock recommendations and, if so, whether investors are misled by such biases. Using quantitative measures of potential conflicts constructed from a novel data set containing revenue breakdowns of analyst employers, we find that recommendation levels are indeed positively related to conflict magnitudes. The optimistic bias stemming from investment banking conflicts was especially pronounced during the late-1990s stock market bubble. However, evidence from the response of stock prices and trading volumes to upgrades and downgrades suggests that the market recognizes analysts' conflicts and properly discounts analysts' opinions. This pattern persists even during the bubble period. Moreover, the 1-year stock performance following revised recommendations is unrelated to the magnitude of conflicts. Overall, our findings do not support the view that conflicted analysts are able to systematically mislead investors with optimistic stock recommendations. (c) 2008 by The University of Chicago. All rights reserved.