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 analystsí 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.
Connections, Analyst Forecast Quality.