A view to a deal: the effect of upcoming investment banking transactions on financial analysts’ target price estimates
研究欧盟卖方分析师是否为了争取投行业务而抬高目标价，发现执法薄弱国家的分析师在交易前更乐观且准确性更低，而MiFID指令实施后有所缓解但未完全消除。
This study investigates whether sell-side analysts issue inflated target price estimates to compete for investment banking mandates in the European Union (EU), and whether country-specific weaknesses in regulatory enforcement diminish the mitigating effects of stricter financial-market regulation. We find that, irrespective of previous business ties with the target firm, target prices become more optimistic (and, as a consequence, less accurate) in the run-up to an investment banking transaction for target firms located in countries with weaker enforcement regimes. In contrast, for firms in countries with stronger enforcement regimes, we observe the opposite to be the case. Furthermore, we find that analysts’ optimistic biases have been mitigated, but not fully eliminated, since the implementation of the European Markets in Financial Instruments Directive (MiFID) in 2007 in low-enforcement countries. Overall, our results demonstrate that reducing country-level differences in enforcement constitute a significant factor in effectively regulating analysts’ conflicts of interest, and in improving investor protection within the EU.