Analyst Career Concerns, Effort Allocation, and Firms' Information Environment

• 成果类型: Article
• 署名作者: Harford, Jarrad; Jiang, Feng; Wang, Rong; Xie, Fei
• 署名单位: University of Washington; University of Washington Seattle; State University of New York (SUNY) System; University at Buffalo, SUNY; Singapore Management University; University of Delaware
• 刊物名称: REVIEW OF FINANCIAL STUDIES
• ISSN/ISSBN: 0893-9454
• DOI: 10.1093/rfs/hhy101
• 发表日期: 2019
• 页码: 2179
• 关键词: SELL-SIDE RESEARCH; EARNINGS FORECASTS; performance; accuracy; ability

摘要

Analysts strategically allocate more effort to portfolio firms that are relatively more important to their careers. Thus, the other firms the analysts cover indirectly affect a firm's information environment. Controlling for analyst and firm characteristics, we find that an analyst makes more accurate, frequent, and informative earnings forecasts and recommendations for firms ranked higher within her portfolio based on proxies for importance to institutions. A firm's relative rank widely varies across analysts, but its information environment improves when a larger proportion of analysts consider it to be relatively important. Analysts experience more favorable career outcomes when strategically allocating their efforts.