This study compares the earnings forecasts of analysts employed by independent research firms to those of analysts employed by investment banks along the dimensions of accuracy and optimism. We discuss the conflicts of interest faced by both groups and suggest that, despite incentives stemming...

This study compares the earnings forecasts of analysts employed by investment banks to those employed by firms not involved in investment banking. We discuss possible resource and informational advantages for investment bank analysts, and conflicts of interest faced by both groups, suggesting...