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The University of Alabama

UA’s Agrawal Co-Authors FMA’s ‘Best Paper;’ Research Examines Analyst Conflicts and Stock Recommendations

TUSCALOOSA, Ala. – A paper co-authored by Dr. Anup Agrawal, professor of finance and holder of the William A. Powell Chair of Finance and Banking at The University of Alabama’s Culverhouse College of Commerce, has received the “Best Paper” award at the recent Financial Management Association meeting in Chicago.

The paper, titled “Do Analyst Conflicts Matter? Evidence from Stock Recommendations,” was co-authored with Dr. Mark Chen, assistant professor of finance at the University of Maryland.

The paper won the “Financial Markets and Institutions” category, which is sponsored by Fannie Mae. Fannie Mae is a private, shareholder-owned company that works to make sure mortgage money is available for people in communities across America.

The paper by Agrawal and Chen looks at conflicts of interest with investment bankers and their affiliated brokerages. They find that the conflicts of interest do influence recommendations. However, the authors write that these conflicts and biased recommendations probably are known by investors and therefore the market place is not tricked. The authors note that, “Overall, our findings do not support the view that confliced analysts are able to systemtically mislead investors with optimistic stock recommendations.”

Agrawal received his bachelor’s degree from the University of Bombay, his M.B.A. from Xavier and his doctorate from the University of Pittsburgh. He has had articles published in the Journal of Finance, Journal of Financial Economics, Journal of Law and Economics, Journal of Business, Journal of Financial and Quantitative Analysis, Economic Theory, and Journal of International Money and Finance.

He has presented his research at seminars and conferences around the world. His research has received more than 1,000 citations in academic papers and textbooks. He is ranked among the top 1 percent of all authors on the Social Science Research Network.

Agrawal’s research has also been the subject of feature stories in “Financial Times Deutschland” and “Wall Street Journal Online.” He has been a visiting faculty member at the Wharton School of the University of Pennsylvania. He is a member of the Editorial Boards of the Journal of Corporate Finance, the Journal of Financial Research and three other academic journals. He served as co-chair of the Corporate Finance Track at the 2004 annual meetings of the Financial Management Association. Before coming to academia, he worked for two years with an international management consulting firm.

Chen received his doctorate from Harvard University. His research interests include corporate finance, corporate governance, agency theory, and microeconomic theory. His current research focuses on executive compensation, securities analysts, and agency problems in the securities industry. His articles have been published in the Journal of Finance, the Journal of Business, and the Journal of Economic Theory. Chen’s teaching interests include investments and corporate financial management.

The Financial Management Association International was established in 1970 and has become the global leader in developing and disseminating knowledge about financial decision making. FMA’s members include academicians and practitioners across the world.

The Culverhouse College of Commerce and Business Administration was established in 1919. Ten years later, in 1929, the School of Commerce and Business Administration became the 38th school to earn admission into the American Association of Collegiate Schools of Business, and was the only accredited college of business in Alabama until the 1970s. The Culverhouse undergraduate program is ranked 36th among public universities and the accounting program is ranked 17th among public universities.

The paper may be accessed at

The University of Alabama, a student-centered research university, is experiencing significant growth in both enrollment and academic quality. This growth, which is positively impacting the campus and the state's economy, is in keeping with UA's vision to be the university of choice for the best and brightest students. UA, the state's flagship university, is an academic community united in its commitment to enhancing the quality of life for all Alabamians.