Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
960617 | Journal of Financial Economics | 2007 | 25 Pages |
Abstract
Using a sample of all-star analysts who switch investment banks, we examine (1) whether analyst behavior is influenced by banking relationships and (2) whether analyst behavior affects investment banking deal flow. Although the stock coverage decision depends on the relationship with the client firms, we find no evidence that analysts change their optimism or recommendation levels when joining a new firm. Investment banking deal flow is related to analyst reputation only for equity transactions. For debt and M&A transactions, analyst reputation does not matter. There is no evidence that issuing optimistic earnings forecasts or recommendations affects investment banking deal flow.
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Authors
Jonathan Clarke, Ajay Khorana, Ajay Patel, P. Raghavendra Rau,