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Dr. An-Ping Lin
Assistant Professor of Accounting
School of Accountancy
Singapore Management University

We examine the effect of analyst anonymity on the attributes of financial analysts’ earnings forecasts. Using switching to anonymous analyst research by Thomson Reuters as a natural experiment, we compare the research quality of anonymous analysts with that of non-anonymous analysts. We find that anonymous analysts issue less optimistic and more accurate forecasts after the switch, compared to non-anonymous ones. The effects of anonymity are more pronounced for analysts from brokerage houses without an existing investment banking relationship with the covered firms and for analysts who are hard to identify through alternative sources. We also find that firms covered by a high number of anonymous analysts demonstrate improved quality of their information environment. Collectively, the results indicate that anonymous analysts face less pressure from brokerage houses to curry favor with clients, resulting in improved forecast performance and quality of covered firms’ information environment.