Can FinTech Competition Improve Sell-Side Research Quality?

• 成果类型: Article
• 署名作者: Jame, Russell; Markov, Stanimir; Wolfe, Michael C.
• 署名单位: University of Kentucky; University of Texas System; University of Texas Dallas; Oklahoma State University System; Oklahoma State University - Stillwater
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/TAR-2019-0266
• 发表日期: 2021
• 页码: 287-316
• 关键词: CONFLICTS-OF-INTEREST; ANALYSTS FORECASTS; career concerns; MARKET; reputation; management; accuracy; Informativeness; recommendations; performance

摘要

We examine how increased competition stemming from an innovation in financial technology influences sell-side analyst research quality. We find that firms added to Estimize, an open platform that crowdsources short-term earnings forecasts, experience a pervasive and substantial reduction in consensus bias and a limited increase in consensus accuracy relative to matched control firms. Long-term forecasts and investment recommendations remain similarly biased, alleviating the concern that the documented reduction in bias is a response to broad economic forces. At the individual analyst level, we find that bias reduction is more pronounced among close-to-management analysts, and that more biased analysts respond by reducing their coverage of Estimize firms. The collective evidence suggests that competition from Estimize improves sell-side research quality by discouraging strategic bias.