Analysis Of The Impact Of Local Government Officials’ Changes On Analysts’ Forecasts.

Under the background of economic transition and unique political system,China’s capital market has been deeply intervened by government for a long time.Local government officials play an important role in the development of regional economy,and it is one of the key factors that affect regional policies and economic environment.The change of local government officials may not only to break the political relevance of the original,but also may be due to the differences in the formulation and implementation of policies between the former officials and officials in succession,and increase the policy uncertainty and discontinuity,have a significant impact on the business environment,investment decision,risk and return etc.of the area.This paper,for the first time,combines the institutional environment factors,the analyzed company factors,and the direction,accuracy and divergence of the earnings forecast of securities analysts to carry on a deep research.This paper confirms that these factors will significantly increase the enterprise’s risk in the area,after consideration of the information,according to the "conservative" hypothesis,analysts will be lower the earnings forecast for the enterprise where the local government officials change.According to the degree of change and the reason of change,the degree of profit forecast is also different.There is no significant difference in the effect of the adjustment of earnings forecasts between the local government and the non local ones.And abnormal changes are relative to normal changes,which will lower analysts’earnings forecasts.Because of the improvement of the public information sufficiency,reducing the degree of information asymmetry,and reduce the differences of earnings forecast but increase the degree of accuracy.Study about the impact on the securities analysts’ earnings forecast due to the change of local government officials,first can verify the existence of the information and political impact on the securities analyst earnings forecast error,can also improve the securities investment analysis model to verify the information from the source of whether it can effectively improve the securities analyst earnings forecast quality,improve the securities analyst earnings forecast accuracy,provide reasonable investment advice to investors,so as to optimize the market allocation of resources,and ultimately improve the efficiency of capital market in china.