A Study On The Impact Of Executive Political Connections On Analyst Optimism In Earnings Forecasts

Because our country's capital market sustainably develops,analysts have played a significant role of the capital market.In improving the efficiency of capital market,they play an important role.The investment decisions of market participants will be effected by the forecast information of analysts,and the effectiveness of the entire market will also be effected.In addition,my country has begun to implement the IPO registration system.The implementation of the registration system has lowered the threshold for companies to go public.The regulatory authorities do not conduct substantive examination of the application materials of companies to be listed.The development prospects of the companies need to be judged by the investors themselves.In this case,The information provided by the analyst is particularly important.Therefore,it is necessary to take a step to explore the factors that affect the analyst's forecast results.Due to the widespread phenomenon of political connections among corporate executives in my country,studies have shown that political connections among executives will have a certain impact on the business activities of companies,which in turn affects the predictability of corporate earnings.This article main studies how the political connections of executives effect the optimism of analyst earnings forecasts.This study employs the sample of A-share companies from 2009 to 2019 to analyze whether senior management's politically connected companies will affect the optimism of analysts' earnings forecasts and the path of influence,and further study the publication of documents prohibiting government officials from working in companies.,Whether it will affect the relationship between the political connections of executives and the optimism of analysts' earnings forecasts;finally,study the economic consequences of such effects.Through research,the main conclusions of this article are: senior management political connections will reduce the optimism of analyst earnings forecasts;senior management political connections affect the self-interested behavior of government subsidies,which is the path that affects analysts' earnings forecast optimism.After the robustness test,the conclusions of this paper are still valid.In further analysis,after the implementation of the policy of prohibiting government officials to take part-time jobs in company,the "Proposal of Regulating Part-time Jobs in Enterprises of Party and Government Leading Cadres ",the results of the study showed that the political affiliation of senior management can be the enterprise Bringing more government subsidies reduces the optimism of analysts' earnings forecasts.After the implementation of the policy,there is no significant correlation between executive political connections to corporate government subsidies and analyst earnings forecast optimism,indicating that the release of this document alleviated the impact of executive political connections on government subsidies and analyst earnings forecast optimism.With regard to the research on the economic consequences of government subsidies.The research results show that the government of politically-associated enterprises Subsidies are not conducive to improving corporate performance,and government subsidies from non-political affiliates have no significant impact on corporate performance.The research content of related fields are enriched by this research,and this research helps to expand the perspective of analysts' predictive behavior factors,and helps users of information refer to analyst forecast information more effectively.