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The Impact of Corporate Political Connections on Analyst Forecast Quality

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Listed:
  • Tzu-Ching Weng
  • Kai-Jui Hsu
  • Yi-Wei He

Abstract

The purpose of this study is to investigate whether the companies have significant impact of political connections on analyst forecasts quality. Refer to the literature on relevant analyst information in the past, especially distinguish the information obtained by analysts into public information and private information, and check whether it will affect the quality of analysts’ forecast information. Our empirical results show that there is a significant negative correlation between companies with political ties and the accuracy of analysts' public information. It indicates that when companies have political connections, companies are only willing to disclose information to specific stakeholders, resulting in information asymmetry. Meanwhile, the accuracy of public information obtained by analysts is relatively low, while the accuracy of private information is relatively high for the companies with political connections.  JEL classification numbers: G30, M41.

Suggested Citation

  • Tzu-Ching Weng & Kai-Jui Hsu & Yi-Wei He, 2023. "The Impact of Corporate Political Connections on Analyst Forecast Quality," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 13(6), pages 1-1.
    • Handle: RePEc:spt:apfiba:v:13:y:2023:i:6:f:13_6_1
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    More about this item

    Keywords

    Political Connections; Analyst Forecast Quality.;

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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