CDS trading and analyst optimism

被引：4
|
作者：
Zhao, Chen [1 ]
Li, Yubin [2 ]
Govindaraj, Suresh [3 ]
Zhong, Zhaodong [4 ]
机构：
[1] Southwestern Univ Finance & Econ, Sch Accounting, Chengdu 611130, Peoples R China
[2] Harbin Inst Technol, Sch Econ & Management, Shenzhen 518055, Peoples R China
[3] Rutgers State Univ, Rutgers Business Sch Newark & New Brunswick, Dept Accounting & Informat Syst, 1 Washington Sq Pk,Room 934, Newark, NJ 07102 USA
[4] Rutgers State Univ, Rutgers Business Sch Newark & New Brunswick, Dept Finance & Econ, 100 Rockafeller Rd,Room 5135, Piscataway, NJ 08854 USA
来源：
BRITISH ACCOUNTING REVIEW | 2022年 / 54卷 / 04期
基金：
中国国家自然科学基金;
关键词：
Credit default swaps; Analyst forecast; Optimism; CREDIT DEFAULT SWAPS; EARNINGS FORECASTS; OF-INTEREST; DEBT; DISCLOSURE; MANAGEMENT; LIQUIDITY; EQUITY; FIRMS; BIAS;
D O I：
10.1016/j.bar.2022.101109
中图分类号：
F8 [财政、金融];
学科分类号：
0202 ;
摘要：
This paper investigates whether and how the initiation of Credit Default Swaps (CDS) trading affects analyst forecast optimism. First, we document that the initiation of CDS trading curbs analyst forecasts optimism. Second, we find that the dampening effect of CDS on analyst optimism is stronger for firms with negative news and for firms with poorer financial performance or higher leverage, supporting a "correction effect" of CDS on non-strategic optimism. Moreover, we find that CDS also has a "disciplining effect" on strategic optimism that arises from incentives to cultivate relation with management or to please institutional investors. Overall, our evidence shows that the CDS market not only provides important information for analysts, but also alters analysts' reporting incentives and enhances their objectivity. Additional analysis shows that this effect has disappeared after the Dodd-Frank Act.
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页数：17
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