We examine how the research departments of brokerage firms may issue biased recommendations in order to boost the revenue of the investment banking departments of the brokerage firms during 1993-2006. We find that during 1993-2006, sanctioned brokerage firms' upgrades not only underperformed the...

We examine how the research departments of brokerage firms may issue biased recommendations in order to boost the revenue of the investment banking departments of the brokerage firms during 1993-2006. We find that during 1993-2006, sanctioned brokerage firms' upgrades not only underperformed the...

We link brokerage firm revenue and affiliated analysts' recommendations to the firms' competitive positions in product markets. Our first important finding is that affiliated analysts tend to assign more favourable ratings to the firms with high market power (more competitive firms) during...