What Motivates Buy-Side Analysts to Share Recommendations Online?

• 成果类型: Article
• 署名作者: Crawford, Steven; Gray, Wesley; Johnson, Bryan R.; Price, Richard A., III
• 署名单位: University of Houston System; University of Houston; Creighton University; University of Oklahoma System; University of Oklahoma - Norman
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2017.2749
• 发表日期: 2018
• 页码: 2574-2589
• 关键词: security analysts; stock recommendations; Hedge funds; social networks; buy-side analysts

摘要

We examine why buy-side analysts share investment ideas on SumZero.com , a private social networking website designed to facilitate interaction and information sharing among buy-side professionals. We explore labor market motivations for information sharing and document that analysts with strong incentives to build a reputation (i.e., those who did not attend a top 10 university and those employed at small funds) are significantly more likely to share recommendations. Our findings indicate that analysts who share ideas are more likely to change jobs and that the likelihood of employment change is positively related to the ratings provided by peers. We also document that analyst recommendations generate significant returns when they are posted on SumZero and that prices drift in the direction of the recommendation. Long-window returns are particularly strong for contrarian buy recommendations and for most sell recommendations. Overall, we show that buy-side analysts share valuable private information in an online social network and that this can be an effective reputation-building and job-seeking tool.