Political Contributions and Analyst Behavior
Florida State University - The College of Business
University of Miami - School of Business Administration
October 1, 2013
McCombs Research Paper Series No. FIN-01-12
We show that personality and psychological traits of analysts, as revealed by their personal political contributions, influence their forecasting styles and the information dissemination process. Analysts who contribute primarily to the Republican Party exhibit a more conservative forecasting style. Their earnings forecast revisions are less likely to be bold, while their stock recommendations contain more modest upgrades and downgrades. Further, their forecasts are more accurate since conservative behavior partially mitigates the adverse effects of known analyst biases. The market reaction following revisions by analysts who contribute primarily to the Republican Party is weaker even though their forecasts are more accurate.
Number of Pages in PDF File: 58
Keywords: Political contribution, Republican, Conservative, Analyst, Forecasting Styleworking papers series
Date posted: October 3, 2010 ; Last revised: October 3, 2013
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