Sell†Side Analyst Research and Reported Conflicts of Interest

Daniel Arand and Alexander G. Kerl

European Financial Management, 2015, vol. 21, issue 1, 20-51

Abstract: Using a unique dataset of conflicts of interest reported by a large investment bank, we examine the relationship between conflicts of interests and sell†side analysts’ behaviour in setting target prices and stock recommendations. We demonstrate that the aggregate number of simultaneous business ties with a subject company is positively associated with optimism in target prices and recommendations. Furthermore, the results provide some indication that stocks for which conflicts of interests exist earn lower risk†adjusted returns than unconflicted stocks. However, we find no evidence that investors discount the value of sell†side analysts’ research with respect to the prevailing level of conflicts.

Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://doi.org/10.1111/j.1468-036X.2012.00661.x

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:eufman:v:21:y:2015:i:1:p:20-51

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1354-7798

Access Statistics for this article

European Financial Management is currently edited by John Doukas

More articles in European Financial Management from European Financial Management Association Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().