Career Concerns of Banking Analysts
Journal of Accounting and Economics
Reason for embargo
We study how career concerns influence banking analysts’ forecasts. Banking analysts’ first (last) earnings forecast of the year is relatively more optimistic (pessimistic) for a bank that could be their future employer. This pattern is not observed when the same analysts forecast earnings of banks unlikely to be their future employer. We use the Global Settlement as an exogenous shock on career concerns and show that this forecast pattern is more pronounced after the Settlement. Moreover, we find evidence that more biased analysts in their forecasts of potential future employers are more likely to move to a higher reputation bank.
This is the author accepted manuscript. The final version is available from Elsevier via the DOI in this record.
Vol. 63, Iss. 2–3, April–May 2017, pp. 231–252