Relationship Transaction And Analysts’ Earnings Forecasts

China’s securities market was still at the developmental stage with unperfectedoperating mechanism, and the individual investors were in the majority. Individual investors lacked professional knowledge on finance and accounting field, and located in the weak information position, therefore, they need the professional information service supported by securities analyst. The capital market infomediary-securities analyst, they will improve the asymmetry phenomenon between investorsand public companies through the analysis of accounting information to enhance the allocative efficiency. On the other hand, the analyst could issue the earnings forecast to meet the information demand. Thus, securities analyst has much more significant status in capital market.The effect factors of earnings forecast were always treated as the exploration point of scholars in this field. The present literatures mainly focus on the effectiveness of accounting information quality, audit quality, scale of company,and management on earnings forecast, there exit few explorations on the perspective of relational transaction. Recently, scholars stated that supplier and the effect of customer concentration on auditing behavior, capital structure,and ownership structure have different effect on earnings forecast. Relational transaction will reduce trade cost, thus, the area with poor legal environment favor relational transaction. China was in the stage of transition economy with imperfectlegal system, and it provides an opportunity to research the effectiveness of relational transaction on earnings forecast of analyst. The thesis took two public companies in manufacturing industry as research sample and based on the theory of efficient market and information availability aims to explore the effectiveness of relational transaction on earnings forecast of analyst. The results show that there was a negative linear correlation between customer concentration and followers of earnings forecast; the concentration of customer and prediction error shows significant positive correlation; the concentration and prediction divergence shows significant positive correlation. It didn’t exit significant correlativity between supplier concentration and earnings forecast. The research of this thesis enriches the study of earnings forecast of securities analyst in new perspective.Securities analyst mainly focus on audit quality, scale of firm, information quality and performance projection etc. during earning forecast process in previous studies. The research provides a theoretical basis for securities analyst to improve the awareness of relational transaction when handling earning forecast. Therefore, analyst could provide much more reliable prediction information.