The Macbeth Factor: The Dark Side of Achievement‐driving AnalystsK. Hung Chan, Ray R. Wang and Ruixin Wang Abacus, 2021, vol. 57, issue 2, 325-361 Abstract: He et al. (2018) find achievement‐striving analysts exert more effort and exhibit better performance. In this study, we also employ the facial width‐to‐height ratio (fWHR) of analysts as a proxy for achievement drive to re‐examine the performance of achievement‐striving analysts. We argue that achievement‐striving analysts’ superior performance can be alternatively explained by their opportunistic forecast issuances. We find analysts with greater fWHR tend to issue downwardly biased last forecasts before firms’ announcement of actual earnings to curry favour with corporate managers. We also find that analysts with greater fWHR issue more optimistic stock recommendations, especially to underwriting clients of their affiliated brokerage firms, and thus exhibit lower stock picking ability. High‐fWHR analysts are also more likely to issue bold positive forecasts but less likely to convey bold negative news. The market shows its concern regarding such opportunistic forecasting behaviour and penalizes analysts with greater fWHR by reacting less to the forecast revisions they issue. Date: 2021 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:abacus:v:57:y:2021:i:2:p:325-361 Ordering information: This journal article can be ordered from Access Statistics for this article Abacus is currently edited by G.W. Dean and S. Jones More articles in Abacus from Accounting Foundation, University of Sydney |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.