Lending relationships and analysts’ forecasts
We examine earnings forecasts by sell-side analysts employed by a bank with a lending relationship with the covered firms. We find that lender-affiliated analysts' forecasts are more accurate than forecasts by their unaffiliated peers after establishment of the lending relationship. Evidence fr...
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| Veröffentlicht in: | Journal of financial intermediation 2015-01, Vol.24 (1), p.71-88 |
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| container_end_page | 88 |
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| container_issue | 1 |
| container_start_page | 71 |
| container_title | Journal of financial intermediation |
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| creator | Ergungor, Ozgur E. Madureira, Leonardo Nayar, Nandkumar Singh, Ajai K. |
| description | We examine earnings forecasts by sell-side analysts employed by a bank with a lending relationship with the covered firms. We find that lender-affiliated analysts' forecasts are more accurate than forecasts by their unaffiliated peers after establishment of the lending relationship. Evidence from exogenous variation suggests that the relationship is causal. Lender-affiliated analysts are also more likely to issue pessimistic forecasts below their peers' consensus. These forecasts are likely to be followed by below-consensus earnings. The results suggest that lender-affiliated analysts enjoy an informational advantage that spills over from lending activities of banks. |
| doi_str_mv | 10.1016/j.jfi.2014.02.001 |
| format | Article |
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| fulltext | fulltext |
| identifier | ISSN: 1042-9573 |
| ispartof | Journal of financial intermediation, 2015-01, Vol.24 (1), p.71-88 |
| issn | 1042-9573 1096-0473 |
| language | eng |
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| source | Elsevier ScienceDirect Journals Complete |
| subjects | Bank loans Banking Banking industry Banks Earnings Earnings forecasting Enterprises Financial analysis Forecasts Information sharing Studies |
| title | Lending relationships and analysts’ forecasts |
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