Career Concerns of Banking Analysts

47 Pages Posted: 24 Apr 2015 Last revised: 19 Apr 2017

See all articles by Joanne Horton

Joanne Horton

University of Warwick - Warwick Business School

George Serafeim

Harvard Business School

Shan Wu

Nanjing University

Date Written: March 24, 2017


We study how career concerns influence banking analysts’ forecasts. Banking analysts’ first (last) earnings forecast of the year is relatively more optimistic (pessimistic) for a bank that could be their future employer. This pattern is not observed when the same analysts forecast earnings of banks unlikely to be their future employer. We use the Global Settlement as an exogenous shock on career concerns and show that this forecast pattern is more pronounced after the Settlement. Moreover, we find evidence that more biased analysts in their forecasts of potential future employers are more likely to move to a higher reputation bank.

Keywords: analysts, conflicts of interest, career concerns, bias, labor market, sell-side analysts

JEL Classification: G4, M4

Suggested Citation

Horton, Joanne and Serafeim, George and Wu, Shan, Career Concerns of Banking Analysts (March 24, 2017). Journal of Accounting & Economics (JAE), Volume 63, Issues 2-3, April-May 2017, Pages 231–252., Available at SSRN: or

Joanne Horton

University of Warwick - Warwick Business School ( email )

Coventry CV4 7AL
United Kingdom

George Serafeim (Contact Author)

Harvard Business School ( email )

Boston, MA 02163
United States


Shan Wu

Nanjing University ( email )

22 Hankou Road
Nanjing, Jiangsu 210093 210093

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