Brokerage House Initial Public Offerings and Analyst Forecast Quality

• 成果类型: Article
• 署名作者: Bradshaw, Mark; Drake, Michael; Pacelli, Joseph; Twedt, Brady
• 署名单位: Boston College; Harvard University; University of Oregon
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2022.4610
• 发表日期: 2023
• 页码: 7079-7094
• 关键词: Initial public offering; Financial institutions; INVESTMENT; Sell-side analysts; forecasting; research quality

摘要

We examine how brokerage firm initial public offerings (IPOs) influence the research quality of sell-side analysts employed by the brokerage. Our main results focus on earnings forecast bias and absolute forecast errors as proxies for research quality. Using a staggered difference-in-differences analysis, we document significant decreases in forecast bias and absolute forecast error during the two-year period centered on the analysts' brokerage house IPO. In additional analyses, we explore several potential explanations for the short-term benefits of brokerage house IPOs. We find some evidence that IPOs delay the departure of more talented analysts and that the effects are more concentrated among analysts and brokers that face more scrutiny.