TY  - JOUR
AU  - Chan,Louis K. C.
AU  - Karceski,Jason
AU  - Lakonishok,Josef
TI  - Analysts' Conflict of Interest and Biases in Earnings Forecasts
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9544
PY  - 2003
Y2  - March 2003
UR  - http://www.nber.org/papers/w9544
L1  - http://www.nber.org/papers/w9544.pdf
N1  - Author contact info:
Louis Chan
Department of Finance
University of Illinois
113 Commerce West, MC 706
1206 S. Sixth
Champaign, IL 61820
Tel: 217/333-6391
E-Mail: l-chan2@uiuc.edu

Jason Karceski
University of Florida
P.O. Box 117168
Gainesville, Florida 32653
Tel: 352/846-1059
Fax: 352/392-0301
E-Mail: no email available

Josef Lakonishok
University of Illinois, Department of Finance
College of Commerce & Business Administration
1206 S. Sixth Street
Champaign, IL 61820
Tel: 217/333-7185
Fax: 217/244-1151
E-Mail: jlakonishok@yahoo.com
AB  - Analysts' earnings forecasts are influenced by their desire to win investment banking clients. We hypothesize that the equity bull market of the 1990s, along with the boom in investment banking business, exacerbated analysts' conflict of interest and their incentives to adjust strategically forecasts to avoid earnings disappointments. We document shifts in the distribution of earnings surprises, the market's response to surprises and forecast revisions, and in the predictability of non-negative surprises. Further confirmation is based on subsamples where conflicts of interest are more pronounced, including growth stocks and stocks with consecutive non-negative surprises; however shifts are less notable in international markets.
ER  -