دانلود رایگان مقاله انگلیسی تاثیر ابقای مدیریت بر تعصب تحلیلگران - الزویر 2018

ABSTRACT

While analyst bias is well documented, its relationship with corporate governance has been neglected. We claim that entrenched management of covered firms significantly increases analyst bias. By using governance index as a proxy for managerial entrenchment, we show that analyst bias increases as managerial entrenchment increases and affiliated analysts do not provide biased research for firms with the least and most entrenched managers due to their reputational capital concerns. Furthermore, our results show that as the channels managers use to pressure analysts get clogged after the regulations that took place between 2000 and 2003, entrenched managers’ effect on analyst behavior disappeared.

4. Conclusion

Using G-Index, created by Gompers et al. (2003) as a proxy for managerial entrenchment, we show that analysts provide more optimistic research as managerial entrenchment worsens. Using indirect channels, non-public information and investment banking and M&A advising business, managers motivate analysts to shift their balance toward conflict of interest.

On the other hand, the commonly documented affiliated analyst bias is present for only the medium-level entrenchment sample. For the most and least entrenchment samples affiliated bias is not significant, suggesting that affiliated analysts do not behave differently from unaffiliated analysts when they cover companies with the least and most entrenched managers due to reputational concerns. Our pre-regulation and post-regulation analyses show that our results are mainly derived from pre-regulation period. As managers lost the channels to affect analyst behavior owing to regulations implemented between 2000 and 2003, the effect of managerial entrenchment on analyst bias disappears in the post-regulation period.